Alberta's Bill C-12: A Perfectly Constitutional Answer To BC's Trans Mountain Intransigence?

The prevailing wisdom appears to be that Alberta's recently-announced Bill C-121 is a constitutional dead duck. The Bill, titled the Preserving Canada's Economic Prosperity Act, would authorize the province's Minister of Energy to restrict the flow of its oil and gas exports using licencing requirements. Alberta's NDP makes no secret that the legislation responds to "[r]oadblocks put in place by the British Columbia government" to building new pipeline capacity. B.C.'s Attorney General, David Eby, has called the legislation a "bluff," vowing to block its implementation in court. Andrew Coyne, writing in the National Post, calls it a "flagrantly unconstitutional exercise." A Globe and Mail staff editorial finds "more evidence that Canada's provincial premiers will upend any and all laws in order to score political points."

There is no question Bill C-12 plays well to a frustrated Alberta public ahead of the upcoming 2019 provincial election. But what if Bill C-12 is not only good law, but also an astute policy response to B.C.'s promise to use "every tool in the toolbox" to frustrate the federally-regulated Trans Mountain Expansion project (TMX) pipeline? There are at least five reasons to believe this might just be the case.

1. The ink has not yet dried on Bill C-12

   First, attacks on the constitutionality of Bill C-12 may be premature. By its text, Bill C-12 is not a "self-executing" regulatory framework. The blanket licensing requirement it contemplates, while applicable to natural gas, crude oil and refined fuels exports, first requires an order or orders by the Minister of Energy based on specified economic criteria and "other matters considered relevant" by the Minister. It is not clear what "class of persons," as referenced in the text, may be affected. Applications for export licences will then require new regulations. Finally, the terms and conditions of licences themselves—including the types and quantities of petroleum products, and modes of transportation, affected—will not be known until issued by the Minister. Until that time, it is unclear to what extent Bill C-12 can be said to truly limit trade or whether, as reflected in the preamble, it will instead be more squarely directed at maximizing the value of Alberta's resources in the face of pipeline constraints, as explored below.

2. Stop the presses: Bill C-12 will not likely discriminate against BC

   Premier Horgan of B.C. has characterized Bill C-12 as "provocative legislation with the sole, express purpose of hurting another jurisdiction." Certainly, if Bill C-12 were to target B.C. directly, or even "colourably," there is good reason to believe it would not pass constitutional muster. The Supreme Court's recent decision in R v Comeau (described further below) expressly references "punishing another province" as a purpose that could bring a trade restriction off-side section 121 of the Constitution Act, 1867.2 Likewise, Alberta's authority to regulate energy exports under section 92A(2) of the Constitution Act, 1867 is conditioned on it doing so...