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The Northern Gateway to nowhere

by Reg Whitaker

Every few decades an issue arises that unexpectedly becomes a defining moment for the country. Such issues can creep up and catch decision-makers unawares. The great free trade election of 1988 was one such: when Brian Mulroney signed the Canada-U.S. Free Trade Agreement he had no idea that it would precipitate an election/plebiscite widely understood as a choice between two very different paths into the future for Canada. It was one of the rare instances of an election in which a great public policy issue overshadowed parties and personalities.

When the federal and Alberta governments, along with Enbridge and the various other corporate players in the Alberta oil sands, came up with the idea of a pipeline megaproject – Northern Gateway – that would pump bitumen from Alberta across northern British Columbia to the Pacific coast, whence supertankers would ship the cargo to refineries in Asia to feed the giant Chinese economy, it seemed a no-brainer. In a world in which nonrenewable energy resources were being rapidly depleted, Alberta’s oil sands were increasingly seen as the export driver not just of the Alberta economy but of the Canadian economy as a whole.

With a Prime Minister and a governing party in Ottawa with their deepest foundations in Alberta, Alberta and Ottawa had apparently come full circle from the bitter federal-provincial battles of the 1970s and 1980s. In the 1950s, a U.S. secretary of defense notoriously declared that “what’s good for General Motors is good for America.” In 2012 it seemed that Ottawa, as well as most of corporate Canada, the business press and academic economics departments, were all singing out of a hymn book that began “What’s good for Alberta is good for Canada.”

But a skunk had sneaked into this elite garden party. When Opposition Leader Tom Mulcair warned that the Alberta-driven petro-economy was pushing up the value of the loonie to unacceptably high levels and threatening an onset of the “Dutch disease” in which Canadian nonresource exports could be squeezed out, the Establishment vented its fury at the impertinence of questioning the new Canadian consensus. Mulcair’s words were “divisive” and “destructive,” pitting region against region and Canadian against Canadian. From the tone of the ripostes, one could be forgiven for thinking that Mulcair had blurted out a racist epithet.

As is so often the case when an elite consensus is challenged, Mulcair’s views were caricatured more than engaged. This is not the place to discuss the economic merits of the “Dutch disease” syndrome beyond noting that petro-economies, if not very carefully managed, do have distorting impacts on other sectors, even if the precise measurement of these distortions remains a matter of legitimate debate. Instead I prefer to focus on another element in the attack on Mulcair: that he was initiating a “war against the west.”

The concept of the “west” has to be deconstructed. For too long Alberta has appropriated the regional voice of the “west” to amplify its provincial interests and its provincial perspectives. Northern Gateway highlights how something that appears manifestly a good thing in Alberta can appear quite the opposite beyond the Rockies. The first fruits of Mulcair’s “war against the west” appeared in Canada’s westernmost province: a boost in NDP poll numbers in British Columbia. War against the west in Alberta could be seen as war for the west in B.C. The negative B.C. reaction to Northern Gateway is one key to this paradox.

There were some one-off economic benefits to B.C. promised in the pipeline construction and port enlargement. However, such benefits were more than overshadowed by the enormity of the environmental risks. The pipeline route takes it across remote, rugged mountainous terrain crisscrossed by close to 800 waterways, including the headwaters of three major watersheds. The severe environmental threat was highlighted when Enbridge was hit with a series of embarrassing spillages, including a major destructive spill in Michigan, where an American regulator slammed Enbridge’s tardy response as worthy of “Keystone Kops.”

Potentially even worse is the threat of some 500 supertankers per year, each carrying up to a million gallons of heavy bitumen, plying the dangerous Pacific coastline (far more challenging to navigation than the Atlantic coast). Since the 1970s there has been an informal ban on tankers in the Queen Charlotte Sound and adjacent areas. The spectre of another Exxon Valdez or BP disaster represents a terrifying prospect of devastation to a very delicate ecosystem. Assurances that the risk is extremely “low” are worthless: a single failure would be catastrophic.

Not surprisingly, First Nations whose lands Northern Gateway would traverse are up in arms (most rejecting the hush money proffered by Enbridge) and plan legal challenges that could tie the approval process up for years in the courts. But British Columbians generally have been appalled and indeed insulted at the idea that their breathtakingly beautiful natural environment should be held hostage for a few local dollars and huge profits for neighbouring Alberta.

It needs saying that there is much more at stake here than a dollars-and-cents calculation. This issue is cultural, touching on the very core of British Columbian identity. Messing with this is decidedly inadvisable for any B.C. politician. Premier Christy Clark learned this lesson at considerable cost. Very late in the game she realized that she could no longer sit on this fence and presented demands to Alberta for environmental guarantees, including a share in oil sands royalties to offset the risks. She was rebuffed by Premier Alison Redford. Clark’s default is threatening to tie up the project by refusing to issue construction permits and throwing other barriers in the way. Voters appear unimpressed by Clark’s unrequited plea for a bribe. According to all polls the NDP, whose wholehearted opposition has given them ownership of the issue, is poised to assume office in the upcoming May 2013 election.

Megaproject proposals like Northern Gateway are normally refracted through a lens that runs economic benefits and environmental impacts together. Typically, decision-makers have to balance economic and environmental issues. When economic concerns weigh more heavily on voters’ and politicians’ minds, as they have since the great crash of 2008, environmental concerns tend to lose out. But here’s the problem: to Alberta, the project overwhelmingly represents economic benefit; to B.C., it overwhelmingly represents environmental risk. This jurisdictional bifurcation is what raises Northern Gateway to a level of significance far beyond the usual run of public policy issues. One of the great conundrums of today, economic growth versus ecological responsibility, is thus dramatically encoded in a jurisdictional conflict between provincial partners in a federation. The question is: will B.C.’s environmentally driven opposition or Alberta’s economically driven support win out in the larger Canadian federal system?

There is no doubt where Harper’s Ottawa stands. The so-called “budget implementation” bill in the last session of Parliament was actually a bloated omnibus that systematically set out to gut various environmental controls that might stand in the way of the project, and to eviscerate the National Energy Board holding hearings to review the plan. No longer will the NEB have final say. Instead its recommendation may be overturned by the cabinet, which is to say the PM.

At the same time, Tory outriders like Resources Minister Joe (McCarthy) Oliver have been intimidating “environmentalists and other radicals” supposedly funded by foreign money, who should be silenced because they are trying to “hijack” the review process. Tom Flanagan has proposed dusting off the disused “declaratory power” in the BNA Act that would permit the federal government to simply override any B.C. objections by declaring Northern Gateway a work in the national interest. A government led by a PM from Calgary ramming through a project to Alberta’s benefit against majority and bipartisan B.C. opposition might be constitutional, but the political fallout would be, shall we say, volatile. For that reason the declaratory option is unlikely, but the general perception of a federal Tory government squarely behind Enbridge and Alberta has already led to an unusual display of cabinet dissent from the senior B.C. minister, James Moore. There are after all 21 Tory MPs from B.C. whose seats are on the line in the next federal election.

Stopping the Gateway would hardly be a fatal blow to Alberta. The Keystone XL carrying oil sands bitumen to the United States, temporarily put on hold by the Obama administration, will almost certainly be given final approval now that the U.S. election is over. The NDP has endorsed a proposal to pipe Alberta oil to eastern Canada, from which it has been excluded for decades. At worst it might mean a more measured and responsible development of the oil sands, as the late Peter Lougheed, Alberta’s greatest premier, wisely advised.

Stopping Northern Gateway would deal a blow to Harper’s economically reckless and environmentally irresponsible resource export–led development strategy. Uncontrolled petro-economies are not only lethal to the environment; in the long run, they are bad for business. That’s why B.C.’s battle against Northern Gateway is a battle for all Canadians.

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About the Author

Reg Whitaker
Political scientist Reg Whitaker writes a political column for Inroads and is a member of its editorial board.




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