Alberta leaders cheer court ruling against B.C. bid to regulate bitumen shipments

Alberta political leaders from both sides of the aisle are applauding a court ruling in British Columbia saying the government of that province doesn't have the right to impose laws that could kill the Trans Mountain pipeline expansion.

'B.C. has no authority to ban Alberta oil in a pipeline,' tweets Jason Kenney

Steel pipe to be used in the oil pipeline construction of the Trans Mountain expansion project at a stockpile site in Kamloops, B.C., in 2018. (Dennis Owen/Reuters)

Alberta political leaders from both sides of the aisle are applauding a court ruling in British Columbia saying the government of that province doesn't have the right to impose laws that could kill the Trans Mountain pipeline expansion.

In a unanimous decision released on Friday, B.C.'s Court of Appeal ruled the province cannot restrict oil shipments through its borders.

The ruling marks a win for the Trans Mountain pipeline expansion and Alberta's efforts to get its resources to overseas markets.

The province filed a constitutional reference question to the B.C. Court of Appeal that asked whether it had the authority to create a permitting regime for companies that wished to increase their flow of diluted bitumen.

A five-judge panel agreed unanimously that the amendments to B.C.'s Environmental Management Act were not constitutional because they would interfere with the federal government's exclusive jurisdiction over interprovincial pipelines.

Alberta Premier Jason Kenney, speaking in Toronto, said he was "delighted" by the ruling.

"We're delighted with the unanimous decision of the B.C. appeal court striking down the B.C. New Democrats' outrageous effort to block Alberta energy. This is an affirmation that Canada is an economic union, and that one province cannot block another province's resources and assets," Kenney said.

Kenney was in Toronto to meet with Mayor John Tory, promote Alberta as a place to do business, and cultivate economic partnerships with Ontario.

"This is a critical, strategic victory for Alberta, and it gives us renewed hope that we're going to get coastal access and a fair price for Canadian energy," Kenney said.

Alberta Energy Minister Sonya Savage called it a "great day" at a news conference in Calgary.

"It added to the momentum we've been seeing lately," Savage said. "We've only been in for less than four weeks, and we've seen momentum on Bill C-69 and Bill C-48, and this adds to it. And I think it's just a great day for Alberta."

Alberta NDP Leader Rachel Notley also cheered the result of the court reference, saying it helps make the case for the pipeline stronger.

"Turns out B.C.'s toolbox was more Fisher Price than DeWalt. Alberta's oilsands have helped build this country, and today is a good day for people with toolboxes all across Canada," she said in a statement.

Premier Horgan's minority NDP government took power in 2017 on a promise to use "every tool in the toolbox" to stop the pipeline expansion.

The federally-owned company building the project also welcomed the court's decision, saying it agreed with Ottawa's stance that B.C. was overstepping its bounds with its amended legislation.

"Trans Mountain shares the value Canadians and British Columbian's place on our environment and our coast and will continue to build on the knowledge and understanding we have gained over our 65 years of operations and transporting petroleum products to the West Coast," the company said in a statement provided to CBC News.

B.C. Court of Appeal Justice Mary Newbury wrote on behalf of the panel that the substance of the proposed amendments were to place conditions on and, if necessary, prohibit the movement of heavy oil through a federal undertaking.

Newbury also wrote that the legislation is not just an environmental law of "general application," but is targeted at one substance, heavy oil, in one interprovincial pipeline: the Trans Mountain expansion project.

Supreme Court appeal planned

The B.C. government says it plans to appeal to the Supreme Court of Canada, which must automatically hear reference cases.

The province announced the legislative amendments in January 2018, sparking a trade war with Notley, then the Alberta premier, who retaliated with a ban on B.C. wines in her province.

Premier John Horgan eased the tension by promising to file a reference case asking the Appeal Court whether the amendments were constitutional, prompting Notley to suspend the wine ban in February 2018.

Prime Minister Justin Trudeau's government has purchased the Trans Mountain pipeline and expansion project for $4.5 billion. Construction was paused last August after the Federal Court of Appeal overturned the federal permits.

The project would triple the pipeline's capacity to carry diluted bitumen from the Edmonton area to Metro Vancouver, and increase the number of tankers in Burrard Inlet seven-fold.

Tim McMillan, president of the Canadian Association of Petroleum Producers (CAPP), says the whole episode has been frustrating.

"The court came back very quickly, it came back unanimous and it reaffirmed what everyone felt was the case before it started," he said.

"The cost of blocking pipelines, the utilization of our court systems as a tool to stop investment in Canada's resource development, is inappropriate. And it costs all Canadians when this happens."

The Canadian Energy Pipeline Association (CEPA) praised the court decision for making it clear that pipelines that cross provincial boundaries must be federally regulated.

 "This decision provides critical clarity for Trans Mountain and future interprovincial pipeline projects," said CEPA president Chris Bloomer in a release. 

"This kind of clarity is now needed around Canada's environmental and regulatory processes to ensure Canada can attract new projects and investors."

With files from CBC News