Strip away a year of political maneuvering, and the B.C. government has ended up with the kind of pipeline deal that was most people expected from the start: a bucketload of federal cash in exchange for begrudgingly allowing a new oil pipeline from Alberta to the southern coast.
That was the core of the agreement between Premier David Eby and Prime Minister Mark Carney on Thursday.
It took months of negotiation to sort out numbers, deadlines and wording. But the broad details could probably have been inked some time ago when Alberta Premier Danielle Smith first started ramping up the idea of a new million-barrel-a-day oil pipeline to Asia to diversify exports against a hostile United States.
The Eby government stubbornly insisted the project would never get off the ground. It called the idea a fantasy, uneconomical and foolish, among other things. Consequently, it found itself on the outside looking in for most of the pipeline talks.
Carney helped Eby back down gracefully on Thursday with a memorandum of understanding (MOU) on joint areas of cooperation, alongside up to $20 billion in cash and financing for everything from electricity to child care.
Critically for B.C., the MOU stated: “Canada will maintain the federal North Coast tanker ban without alteration, suspension, or narrowing of scope.”
That took off the table any potential Alberta pipeline to Prince Rupert or Kitimat, which was a non-starter for coastal First Nations but the initial preference of Alberta because it made tanker trips to Asia three days quicker.
In exchange, B.C. signed off on language that said: “Although B.C. does not seek this project, it recognizes its constitutional obligations and commits to acting in good faith to engage in the necessary routing and permitting discussions, within its jurisdiction” as long as Ottawa followed through on promises such as compensation.
Technically, B.C. doesn’t have to “support” a new pipeline, Eby stressed. But it won’t oppose one either.
“We will not be going to court to fight a pipeline project,” Eby said Thursday, acknowledging that approach failed against the Trans Mountain pipeline in 2018.
The MOU cleared the way for Smith and Carney to announce a $43-billion proposal for a southern route late Thursday, using the federal-owned Trans Mountain Corporation alongside private partner Pembina Pipeline Corp. (a major natural gas player in B.C. and partner in B.C.-based Cedar LNG).
Alberta’s proposal would roughly follow the existing Trans Mountain oil pipeline from Edmonton to the Lower Mainland, before diverging to the Roberts Bank port terminal in Delta.
Ottawa offered $10 billion to help upgrade that port in its B.C. deal. It also committed to expand the capacity of the existing twinned TMX pipeline.
The B.C. MOU came with $3.9 billion in cash and financing toward the North Coast transmission line from Prince George to Terrace to help electrify new mines and LNG terminals.
Carney tossed in another $3 billion for the long-delayed Massey tunnel replacement project, which is likely running double or triple its stated $4.15 billion budget.
B.C. also extracted compensation from Ottawa for changing the national carbon benchmark (which could be as high as $2 billion), as well as promises to better align on steel, softwood, skilled trades training, flood mitigation, clean power projects, wildlife conservation, child care and LNG projects.
If a pipeline does go forward, Ottawa promised meaningful compensation to B.C. for the risk. Presumably, that would be much more than the current $50 million a year the province gets for the oil from the current Trans Mountain pipeline to Burnaby.
Broadly put, the deal looks like a win for B.C. — or, maybe, the least worst option for the governing New Democrats.
“He’s been a tough negotiator in this process, but he’s one who recognizes the strengths of this province and the role that we all play in Canada’s future,” Eby said of Carney. “We fought very hard for B.C.’s interests, and we secured an agreement that delivers real benefits for British Columbians.”
It still seems like the deal B.C. was always destined to get from a prime minister that clearly supported Alberta’s pipeline pitch. Still, better late than never. And better something than nothing.
Rob Shaw has spent more than 18 years covering B.C. politics, now reporting for CHEK News and writing for BIV. He hosts the weekly show Political Capital and has a NEW daily podcast, Political Capital Daily .
