Alberta Premier Danielle Smith and Ontario Premier Doug Ford announce the Northern Shield pipeline proposal in Calgary, on Monday.Jeff McIntosh/The Canadian Press
Fred Gallagher chief executive of Canadian Vitality Pathway Inc.
Canada should not have to rely on U.S. courts, U.S. state politics and U.S. transit routes to move Canadian energy from one part of Canada to another. Yet that is the uncomfortable reality Canada faces today.
Much of the Western Canadian crude reaching Ontario and Quebec moves through the Enbridge pipeline system, crossing the U.S. Midwest before re-entering Canada at Sarnia. A significant part of that broader delivery system is Line 5 passing under the Straits of Mackinac – the waterway between lakes Michigan and Huron. While the uninterrupted and tariff-free flow of oil through the United States is protected by the 1977 Transit Pipelines Treaty, the route has attracted controversy and legal challenges for several years. The state of oil flow is precarious.
This is why the new pipeline Alberta and Ontario proposed on Monday is the sovereign solution Canada badly needs right now. This is also why that pipeline is not enough, and why we must be bold and ambitious in building upon its momentum. Let’s restart the cancelled Energy East pipeline as well.
In 2019, Michigan sought to shut down Line 5 due to age (currently 73 years), environmental concerns and anchor damage, calling it a “public nuisance” and “likely to cause pollution.” Since 2018, Enbridge has sought to construct a tunnel replacing the aging pipe. The tunnel work has faced years of permitting delays, litigation, opposition from environmental and Indigenous groups and now a rejection by the U.S. Supreme Court to move a Michigan environmental lawsuit from state to federal court. Replacement of this pipeline section with a tunnel is unlikely to be complete before 2031.
Recent Canada Energy Regulator and Statistics Canada data indicate that Western Canadian crude accounts for approximately 77 per cent (299,000 barrels a day) and 69 per cent (276,000 b/d) of Ontario and Quebec’s refinery feedstock respectively. The Maritimes rely largely on international oil sources that are refined in Saint John, with the majority of East Coast oil production sold internationally. Canada’s energy supply from domestic sources is disconnected and dependent on trading and transportation agreements with the U.S. Recent U.S. trade tensions and “51st state” comments should give Canadians chills.
Alberta and Ontario’s proposal would create a new 3,300-kilometre pipeline route from Hardisty, Alta., to Sarnia, Ont., for half a million barrels per day, crossing four provinces and no American states. It would shield oil flow from U.S. whims and domestic politics. It is a good start on the path to something bigger.
Canada faced the same question of energy sovereignty in 1954 with the development of a natural gas pipeline. The federal politician C.D. Howe, Canada’s “minister of everything,” stated to proponents, “National policy was fixed. There was to be one east-west pipeline built entirely on Canadian soil.” Gas transportation sovereignty was preserved by C.D. Howe insisting on an exclusively Canadian route for the TransCanada gas pipeline.
Alberta, Ontario propose new pipeline in bid to boost Canada’s energy independence
This laid the foundation for Energy East - proposed in August of 2013, an imaginative project. The proposal cost-effectively reused idle portions of the TransCanada natural gas pipeline, to supply Canadian oil via Canadian soil to refineries in Ontario, Quebec, New Brunswick and an East Coast export terminal. This project was not only about expanding oil exports but building a sovereign national oil delivery system. Energy East was cancelled in October, 2017, with TransCanada, now TC Energy, recording an estimated $1-billion after-tax non-cash charge. Multiple reasons were cited, such as “challenging issues and obstacles,” Quebec’s objections, a substantially lower oil price and controversy surrounding how TransCanada had potentially compromised National Energy Board officials.
Subsequent events have made the strategic case for Energy East even stronger. Line 5 remains contested. U.S. trade behaviour has become more aggressive and threatening. Additional West Coast pipeline development remains politically difficult. And disruptions in the Strait of Hormuz illustrates how trade route closures can be used as political and economic weapons.
The revival of Energy East should be on the table as Canada seeks to build vital infrastructure projects of national importance. New-build sections through Quebec, if opposed, could be delayed to a second phase with time to address Quebec’s concerns. Quebec’s opposition to Energy East, as expressed by former Premier Legault in 2018, suggested a give-to-get opening. He stated Quebec wants greater electricity supply access to western markets. That should be part of talks.
Canada’s national objective should be to reduce fossil fuel use. But this transition will take time. In the meantime, our international partners continue to require a safe, reliable and environmentally responsible source of petroleum. And Canada’s economic independence is at risk. We must think of pipelines as projects that do right by our allies and as sovereign projects – ones that do right by us.
Energy infrastructure - in the national interest - would provide Canada with greater control over domestic energy delivery, more supply-chain options to create value at home and more than one coast from which to reach world markets.