Kenneth Brown
of The Crossroads
Saskatchewan and Alberta have both introduced new legislation to restrict the exporting of energy products in response to a pipeline standoff in British Columbia.
The new legislation in both provinces is similar and the acts will allow government ministers in the respective provinces to restrict exports of oil, gas and refined products from the two top oil producing jurisdictions in Canada.
Alberta has introduced Bill 12, the Preserving Canada’s Economic Prosperity Act, and the legislation passed its first reading on April 16 and second reading on May 9. Saskatchewan has introduced Bill 126, the Energy Export Act, and the legislation passed its first reading on April 23 and second reading on May 7.
The legislation, if passed, would give the provincial governments the authority to require any companies exporting energy products from the provinces to acquire a licence or a permit. The legislation in both cases is the same in essence, but the language changes in the acts.
In Alberta, the act could require companies to obtain an export license, and in Saskatchewan, the act could require companies to obtain an export permit. In both cases, the respective ministers have the ultimate authority within the acts.
In accordance with the regulations contained in the acts, the ministers have the authority to reconsider any decisions they have made pursuant to the act. The legislation in both cases has not been adopted, and neither province wants to have to enact the legislation.
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Alberta introduced its legislation first and Saskatchewan soon followed suit. The legislation has been introduced in response to the inaction by the federal government to ensure Kinder Morgan’s Trans Mountain pipeline project could proceed. The B.C. government has taken its case to a Court of Appeal and the project has been on hold since.
Kinder Morgan has given a deadline of May 31 before the company pulls out of the $7.4 billion project to expand its pipeline. The B.C. government is doing its best to block the project to protect its economy and coastline from a major oil spill.
It was reported on May 9 that Saskatchewan has applied for intervener status in the B.C. court case. Saskatchewan has also given its support to back Alberta in a dispute with the B.C. government over the Trans Mountain pipeline. The project has received federal approval from the National Energy Board.
According to a press secretary for the Alberta government, the Preserving Canada’s Economic Prosperity Act would allow the government to restrict the export of energy products to make sure the province is getting the maximum value for products on behalf of citizens.
The statement issued by the press secretary says the powers in the legislation are not powers the Alberta government wants to use, but the province will use the powers if it means the long-term benefit for the industry, province and nation.
Bronwyn Eyre, the ministry of energy and resources for Saskatchewan, said provincial officials thought long and hard about the legislation, but it has not been activated yet. She said the act is going through the legislative process to become law, but it would only be used as a last resort.
“We didn’t want to find ourselves here, but we take finding ourselves here very seriously,” Eyre said, recognizing that the act will be there if needed. “What this really is about, of course, is putting pressure and exerting pressure on the federal government.”
She noted that the B.C. government had approved the Trans Mountain pipeline expansion at the time when it was approved by the federal government and the National Energy Board, but the province has since decided to hold up the project.
Eyre said one province cannot hold another province ransom, but the federal government cannot sit idly by with the future of the project at risk. The provinces need to get products to tidewater. The minister said there is too much at stake for Saskatchewan for the project not to proceed and time is of the essence.
“It really is about protecting economic prosperity and protecting the sector,” Eyre said, adding the province lost $200 million in royalties and the sector lost $2.6 billion last year. “We absolutely have to start to get product to tidewater.”
The minister said the one major difference between the legislation in Saskatchewan and the legislation in Alberta is Saskatchewan’s act has a sunset clause. The act will expire on Jan. 31, 2019 unless it is amended to extend that deadline. If not, it would expire and have to be reintroduced.
She noted that the act contains weighty legislation, so officials wanted the act to have a limited application. Eyre said there used to be an export permitting system in Saskatchewan. Companies would be required to obtain permits on a case-by-case basis. Admittedly, she added that the legislation does not ensure energy products get to tidewater, but it projects the province’s economic interests.
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