The Northern Gateway pipeline could plunge the country into a fascinating constitutional debate if the BC government would follow through on a threat to block the $6 billion project.
Canadian legal experts are divided as to whether or not BC has the power to withhold permits or electricity for the pipeline if the province's conditions aren't met. The BC government staked out its position Monday, saying the pipeline won't proceed without more economic benefits for the province, better environmental protection and adequate involvement from First Nations.
The federal government and Alberta provincial government are enthusiastic backers of the plan to build the pipeline from Alberta's oilsands to the port of Kitimat with the aim of exporting Canadian bitumen to Asia.
University of Calgary law professor Nigel Bankes said if Enbridge fulfills the general terms and conditions of any given permit, the BC government would be forced to grant it ,otherwise it would be picking on one applicant. He said that wouldn't hold up in court, calling BC's legal position "weak."
"If a minister of the Crown is going to say to the director of air emissions, 'Thou shalt not grant a permit to Enbridge,' I think that would probably be inconsistent with the general law and therefore quashable," he explained.
As for the energy to build and maintain the pipeline, Bankes said the BC utilities commission could force BC Hydro to fulfill its duty to provide power.
Errol Mendes, a law professor at the University of Ottawa, disagreed.
He said no court in the country would infringe on BC's right to stop the project by withholding permits and that it would take an extraordinary act by the federal government to intervene and force the pipeline through.
"The Crown in right of British Columbia has powers given to it under the constitution to have control of its territory in certain areas," he said. "When it decides to use those powers not to give the permits it has every constitutional basis for doing so."
He said a federal intervention would be possible, but unlikely due to the political implications involved. Bankes agreed, saying any litigation that might arise if BC tried to block the permits would likely originate from Enbridge.
Another legal issue revolves around BC's goal of getting more of a financial benefit from the project, either by getting money from the government of Alberta or from Enbridge. Alberta Premier Alison Redford has been adamant this week that none of the royalties collected by her province will flow to BC, but Enbridge said it's open to have discussions with BC about a different financial arrangement.
One way BC could get cash from the company is by putting a tax on the oil either entering or leaving the province, however the government would have to be careful with how the law is phrased.
"There would be some possible litigation in terms of whether or not you can tax property that belongs to another province," Mendes said, noting the bitumen moving through the pipeline actually belongs to Alberta. "They could get around that by saying it's a tax on transmission through Crown lands."
Both Mendes and Bankes said any tax would likely have to apply to all pipelines in the province, not just Northern Gateway and that could result in higher prices for consumers in the province. Bankes also believes taxing the oil as it leaves the pipeline would be unconstitutional because it would infringe on the federal government's domain over international trade.
