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Trudeau’s Grand Bargain Unravels After Alberta Nixes Carbon Plan


Court quashes Canadian government approval of key pipeline project. Oil-rich province pulls out of climate strategy in protest.

Canada’s precarious relationship with its vast oil riches flared up again Thursday after a federal court struck down Prime Minister Justin Trudeau’s approval of a key pipeline, reviving fears about the country’s ability to get its resources to market.

While the government pledged to press ahead with the C$4.5 billion ($3.5 billion) Trans Mountain expansion, the leader of oil-rich Alberta pulled out of Trudeau’s marquee national climate plan in protest after the ruling. Indigenous groups and the City of Vancouver had mounted the challenge, and their success highlights the extraordinary political, legal and social battles that a divided Canada has faced for years in developing the world’s third-largest crude reserves.

Trudeau’s Liberals have staked much of their legacy on forging a grand bargain on resources. The prime minister’s Conservative predecessor, Stephen Harper, was seen as overly deferential to the oil industry and dismissive of opponents. Trudeau, however, has sought to win backing for resource development by being more pro-environment and supportive of indigenous concerns — seeking what he calls a “social license” — while also purchasing the troubled project from Kinder Morgan Inc. to make sure it gets built.

“Some of our reputation as a place to invest has been quashed” by the court ruling, former Saskatchewan Premier Brad Wall told BNN Bloomberg television. The decision raises questions of “what is enough” and “what is the process” for project approvals.

Growing Frustration

Finance Minister Bill Morneau was defiant. Speaking on BNN Bloomberg television, he said the government remains committed to the pipeline. “We are going to be here as long as it takes to make sure the project gets done,” Morneau said. He declined to comment on how much of a delay the court ruling would cause.

Trudeau himself later weighed in, saying in a Twitter post that he’d spoken with Alberta Premier Rachel Notley and “reassured her that the federal government stands by the TMX expansion project and will ensure it moves forward in the right way.”

Yet Notley held a press conference late Thursday to announce that Alberta will no longer go along with the federal climate change plan unless the obstacles to the Trans Mountain project are removed. While the province will maintain its current carbon tax of C$30 a ton, pulling out of the federal plan means it will no longer increase that levy to C$50 a ton by 2022.

She called on Trudeau’s government to immediately file an appeal to the decision and call an emergency session of parliament to deal with the matter, among other measures.

“If the federal government acts boldly and gives this crisis the attention it deserves, construction can restart early in the new year,” she said in Edmonton. “This absolutely needs to happen.”

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