Contentious 'turn-off-the-taps' bill puts Alberta, B.C. at legal loggerheads

Premier Jason Kenney has touched off a legal battle with British Columbia after his new Alberta government proclaimed a bill that could block oil and gas exports to the West Coast, prompting B.C. to file court action.

Bill 12 gives Alberta the power to squeeze the supply of oil and gas to B.C.

Minister of Energy Sonya Savage looks on as Alberta Premier Jason Kenney discusses the proclamation of Bill 12 which will allow Alberta to restrict energy exports. (Jason Franson/Canadian Press )

Premier Jason Kenney has touched off a legal battle with British Columbia after his new Alberta government proclaimed a bill that could block oil and gas exports to the West Coast, prompting B.C. to file court action.

On Wednesday, Kenney confirmed that Bill 12 has been enacted into law. In response, British Columbia filed the legal paperwork in Alberta Court of Queen's Bench for an injunction and a constitutional challenge.

Kenney insisted the new law — which gives Alberta the power to cut oil and gas exports to other provinces — will only be deployed as a measure of last resort if the B.C. government continues to obstruct the Trans Mountain pipeline expansion.

He said the current pipeline backlog is hurting people in British Columbia and urged B.C. Premier John Horgan to get out of the way. 

"The B.C. government is doing everything it can to block the expansion of the very pipeline that would get Alberta oil and gas to the gasoline-constrained lower mainland and beyond," Kenney said. "This hurts ordinary families in British Columbia, this hurts Alberta.

"What Premier Horgan must know is that Albertans are absolutely united behind this pipeline. As premier, I will stand with Albertans and we will stand up for Alberta."

Bill 12, the Preserving Canada's Economic Prosperity Act, was passed under the previous NDP government but never enacted into law.

The bill was proclaimed into law Tuesday during the government's first cabinet meeting, shortly after Kenney and his new United Conservative cabinet were sworn in.

Kenney said he wants to build relationships with other premiers and would only use the Bill 12 provisions if all other options are exhausted. The bill was proclaimed, he said, to demonstrate that Alberta is prepared to do what it takes to defend its economic interests. 

Notley warned Kenney to wait

Kenney declined to reveal what actions would push Alberta to use these measures of last resort. 

"When you're in a game of poker, you don't show the other folks around the table what your high card is," he said. 

Horgan denied that B.C. was doing anything to delay the pipeline. He said his government has issued 309 of the 1,182 permits required and will continue to issue new ones in future.

Rachel Notley, the former Alberta premier and leader of the official opposition NDP, said she told Kenney not to proclaim the bill until he needed to use it. By ignoring her advice and enacting the legislation, Kenney has now allowed B.C. to file a constitutional challenge, tie it up in court and render it useless, she said.

"He's a bit like a gunslinger who's swaggering down the streets waving his gun after intentionally taking the bullets out of it," she said.

Notley said her government's intention in passing the bill was to wait until it was necessary to turn off the taps. They would have quickly proclaimed the bill and used its provisions within three hours, before B.C. could file a legal challenge.

Kenney op-ed says he'll defend Alberta interests

The two court actions were filed in Calgary Court of Queen's Bench. The request for an injunction is scheduled to be heard on May 7. 

The statement of claim challenging the constitutionality of Bill 12 argues its purpose is to discriminate against B.C. "in relation to exports of natural gas, crude oil and refined fuels." The B.C. government argues that it contravenes the Constitution Act, 1867, which allows for the free flow of goods throughout the provinces. 

Kenney said he spoke to Horgan on the phone on Tuesday night and plans to meet in person before the western premiers conference in late June.  He said he is meeting with Ontario Premier Doug Ford in Toronto on Friday. 

As well, Kenney is scheduled to speak Thursday morning about Bill C-69 to the Senate's standing committee on energy, the environment and natural resources. Hours later he will meet with Prime Minister Justin Trudeau in Ottawa, according to the prime minister's official itinerary released Wednesday afternoon.

Kenney first announced his government proclaimed the bill via an op-ed in the Vancouver Sun, which published online Tuesday evening. 

The new law creates a licensing scheme for oil and gas suppliers, giving Alberta's energy minister the power to decide how much fuel is exported to B.C., how it's transported and whether direct shipments should be stopped altogether.

Bill 12 gives the government authority to require companies to obtain a licence before exporting energy products from Alberta via pipeline, rail or truck. The bill covers natural gas, crude oil and refined fuels, such as gasoline and diesel.

Anyone who fails to comply with the act could face fines up to $10 million per day for companies, or $1 million per day for individuals.

With files from CBC News