Emerging eastern Canada-western Canada alliance fuelled by trade war

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“We are fiercely opposed to any type of transport on Quebec territory of hydrocarbons from Western Canada to any market whatsoever. It does not serve Quebec.”

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This blunt warning, uttered a few weeks ago by Bloc Québécois Leader Yves-Francois Blanchet, precipitated an equally sharp and public rebuke from Nova Scotia Premier Tim Houston: “Your eagerness to disparage opportunities for ALL Canadians for energy security and intentionally alienate Atlantic Canada is appalling.”

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Houston signed off his Feb. 28 letter to Blanchet with a damning flourish: “It is only small minded thinking that causes Canada to be so dependent on foreign nations.”

It’s tempting to shrug your shoulders at this exchange, remain jaded and assume nothing will change. Bruising pipeline debates reinforce the point; we don’t know what the country of Canada is anymore.

For a decade now, premiers in Alberta and Saskatchewan have been yammering on about what happens if we don’t build more pipelines to tidewater. Years of battling Bill C-69, the federal Liberals’ impact assessment rules, have soured private sector companies on pipeline infrastructure in Canada. Viable projects, including Energy East — the oil pipeline proposed to deliver western Canadian bitumen to refineries and port terminals in Atlantic Canada and possibly Quebec — have been shelved.

Or has something actually shifted; in the midst of a ruthless trade war with a capricious neighbour, are Canadians finally ready to take on these national projects as if our economic lives depended on it? Houston’s willingness to say out loud what many are thinking is surprisingly refreshing.

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As Houston relates to me in a recent call, Blanchet made this bold statement — no pipelines shipping hydrocarbons from western Canada across Quebec — the day before an Angus Reid poll came out saying 74 per cent of Quebecers are in favour of such a pipeline. The wide gap between the poll and Blanchet’s comments “really grinded me,” Houston says, “and I thought, this guy is just out of touch.”

I’m not worried we’re going to be in darkness but it’s a vulnerability and there’s no good reason for it

“The natural gas that is in our system does come through the United States,” he says, “100 per cent of it.” Oil too. Recognizing the vulnerability, Houston is pushing hard for natural resource development in Nova Scotia.

“Now If they (the U.S.) were to make that inaccessible, turn the valve off, do whatever,” says Houston, “we could meet our energy needs but it would mean burning more coal. So I’m not worried we’re going to be in darkness but it’s a vulnerability and there’s no good reason for it. We have to address it.”

Alberta Premier Danielle Smith’s reaction to Trump’s steep tariffs aligns with Houston’s way of thinking. It’s a positive signal in a country that desperately needs pipeline consensus to be more than a mirage.

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“With U.S. tariffs in place on Canadian energy products, Alberta is looking elsewhere for additional pipeline infrastructure, including east and west, in order to get our products to new markets,” Smith announced on March 5th. (The next day, March 6, Trump offered a tariff reprieve until April 2).

Trump has “shattered our confidence that he’s going to honour trade agreements,” Smith shares in a one-on-one telephone conversation. She won’t say whether she feels personally betrayed by Trump, but she’s clear: “When you sign a trade agreement, you expect people to try to live up to it in good faith.”

That’s why Alberta is now telling the world, “we will trade with anyone in Alberta, in Canada, or any country that honours its free trade agreements, and that includes the Americans. If they want to get back to honouring their agreement, we’re happy to continue a flow of products. But in the meantime, we want to deal with the countries that are going to approach it in good faith.”

I ask Smith: What does she make of the BQ’s attempt to stand in the way of pipelines in Quebec? “Well, let’s remember the Bloc wants to split the country up,” she replies, her voice brusque. “So the Bloc is going to take a position that it is going to cause maximum damage to Canada. That’s their position. So I’m glad to see Tim Houston calling them out on it.”

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Like Houston, Smith points to recent polling that reflects over 70 per cent approval for restarting an Energy East 2.0 discussion, in every single province, including Quebec.

“So I think what we have to do,” she elaborates, “and I’ll be a lot more involved in this, is let’s address the issues that the Quebecers have.”

“Perhaps a route through Montreal was very aspirational and turned out to be probably not the best route,” she says. “But maybe there is a route that would be more acceptable to Quebecers. Maybe if we go further north, there are significant gas resources that Quebec can develop themselves for their own people to get a financial benefit from it. Maybe we talk about building another refinery in Quebec so that they can get those value-added jobs. I think if we can talk in terms of Quebec interests, then I think we can get to a solution.”

With their “everything is on the table” approach to retaliatory measures against Trump’s tariffs, federal ministers, notably Mélanie Joly, foreign affairs minister, and Jonathon Wilkinson, energy and natural resources minister, can sometimes dance around the threat to turn off or limit Canadian oil exports to the U.S. as a potential retaliatory measure. How is Smith managing this possible move by Ottawa?

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“I’m very clear,” she replies, her tone stern. And she is: “We do not, we will not use Alberta energy as a weapon in that way. Because if the U.S. decided to retaliate in kind, it would turn off energy to Ontario and Quebec. So, I do not want Ontario and Quebec to be in the dark without gasoline and without home heating. So, anyone who thinks that they’re going to hurt the Americans by taking action like that, it’s like punching yourself in the face. It’s not a good strategy. No one should threaten it.”

There’s a lot of heavy-lifting ahead, for Canada’s premiers. In Atlantic Canada, the abrupt resignation of two premiers — Andrew Furey of Newfoundland and Labrador, and P.E.I.’s Dennis King — shocked many. “It’s a tough time to be a leader right now, in business, in politics,” Houston agrees, “it’s just a tough time to be a leader.”  Yet listening to these two premiers — Houston, 54 and Smith, 53 — gives me hope.

Government leaders need to be onside, provincially and federally, Houston acknowledges, if they are going to convince business leaders in major companies to get excited about pipeline projects. He’s talked with some of the major pipeline companies, to gauge their interest, and playfully animates these conversations in a lilting voice:

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“If the federal government were to use their power and ability to automatically permit, so you didn’t have to worry about permitting, would you build it?” he asks. The corporate response:  “Well, we’re not too sure given the history here.”

“If it’s permitted and the federal government started to build it, what do you think?” The corporate response: “Well, we’re getting a little closer now.”

He chuckles, but Houston is obviously resolved to fight for pipelines needed to ensure access to markets that diversify us away from just one major customer. My backbone straightens a little when he reassures me, “We’re a strong country, and we will respond to this moment.”

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