Court blocks Alberta law curbing energy flows to British Columbia

CALGARY, Alberta (Reuters) - A Canadian court on Tuesday temporarily blocked legislation enabling the province of Alberta to restrict oil and gas flows to British Columbia, leaving the constitutionality of the measure to be decided at a later trial.

FILE PHOTO: The Burnaby Terminal and Tank Farm, the terminus of the Trans Mountain Pipeline, in an aerial photo over Burnaby, British Columbia, Canada, June 29, 2019. REUTERS/Jason Redmond/File Photo

Alberta enacted Bill 12, dubbed the “turn off the taps act” in May, after it was passed by the previous provincial government in retaliation for British Columbia opposing the expansion of the Trans Mountain oil pipeline.

The Trans Mountain project, which would nearly triple the flow of crude from Alberta’s oil sands to British Columbia’s coast, is an ongoing bone of contention between Canada’s two westernmost provinces.

Environmental opposition and regulatory delays have held up the project for years and court challenges are ongoing despite the federal government buying the pipeline last year for C$4.5 billion to help to facilitate construction.

Bill 12, formally known as the “Preserving Canada’s Economic Prosperity Act”, has yet to be used to cut energy shipments. However, Alberta Premier Jason Kenney said it would provide leverage in discussions with British Columbia counterpart John Horgan.

Kenney’s United Conservative Party government was elected in April with promises to stand up for the province’s struggling energy sector and enacting the turn-off-the-taps legislation underscored that belligerent approach.

British Columbia’s lawyers filed court actions against Bill 12 and on Tuesday the federal court said the province had met the criteria for a temporary injunction by showing the legislation would cause harm to its residents.

“The Court rejected Alberta’s argument that this harm is speculative, finding that it was reasonably certain and noted that whether or not the harm is triggered lies entirely within Alberta’s discretion,” the court said in its ruling.

The courts will hear British Columbia’s application for the legislation to be ruled unconstitutional at a future date.

“In our reading of the constitution Alberta is not allowed to restrict the flow of refined products to other provinces to punish them for positions that are taken that they do not like,” said David Eby, British Columbia’s Attorney General.

Alberta’s Energy Minister did not immediately respond to requests for comment.

Asked about the court’s ruling, Canadian Prime Minister Justin Trudeau said he would not engage in internal conflicts between two provinces.

Additional reporting by David Ljunggren; Editing by David Goodman and Tom Brown