With the completion of the Trans Mountain pipeline (TMX) expansion this week, Prime Minister Justin Trudeau has just handed Alberta Premier Danielle Smith the gift that will keep on giving for years to come — billions of dollars worth of economic prosperity for the province’s economy and millions of dollars to the provincial government’s treasury.
Will this finally bring peace to their stormy relationship?
In a word, no.
In fact, it will likely exacerbate the conflict as Smith will feel safer and more secure in her position to launch attacks against her enemies in the federal government as well as her perceived enemies at home.
TMX won’t make her bulletproof but let’s say bullet resistant.
Smith knows that Albertans have a long history of rewarding and re-electing premiers who spend big, tax low and balance budgets — and damn everything else. The trick is to be lucky enough to have billions of dollars flowing from oil and gas revenues to the provincial treasury. And TMX promises to be an open spigot.
Will Smith at least give credit to Trudeau for spending six years and more than $34 billion of taxpayers’ money to triple the capacity of the existing TMX pipeline so it now can pump almost 900,000 barrels per day of crude from Alberta’s oilsands to British Columbia’s Pacific Coast for shipment overseas?
In March, for one brief moment, Smith did offer her “gratitude” to Trudeau but within days was once again on her hobby horse blaming Trudeau for not building more pipelines from Alberta to “tidewater.”
She continued asserting a cynical narrative that began two years ago when she lambasted him as a “virtue-signalling prime minister” who was determined to “landlock our resources.”
In her official statement this week on the startup of the pipeline, Smith didn’t mention Trudeau at all. She congratulated the Trans Mountain Corporation for its “tenacity to have completed this long awaited and much-needed energy infrastructure,” as if the Crown corporation was the one that pushed the project ahead and not Trudeau.
Meanwhile, the prime minister defied his environmentalist supporters to buy the troubled pipeline project in 2018 — and then watched as massive cost overruns quadrupled the price tag. Almost as an afterthought in her statement, Smith offered a generic thank you to the “federal government for seeing this project through.”
The TMX expansion won’t just benefit Alberta’s economy but the whole country’s. Even though in 2022 the Parliamentary budget officer said the project had become a “net loss” for Canada, Finance Minister Chrystia Freeland insists the “great national project” will add a quarter of a percentage point to Canada’s $3 trillion GDP in the second quarter of this year.
Calgary-based economist Trevor Tombe, noted for his non-partisan analyses, wrote in The Hub this week the pipeline “will be highly profitable for many years” and “despite the sticker shock, the pipeline remains incredibly valuable, both as an individual asset and as a key piece of infrastructure for Canada’s economy.”
The Trudeau government reluctantly bought the project after TMX’s owner, Kinder Morgan, threatened to shut down the expansion because of tenacious opposition from the B.C. government.
Trudeau expected the project to be profitable and no doubt hoped it would help save Alberta’s carbon-tax-supporting NDP government from defeat in the 2019 provincial election. It didn’t.
Now that the oil is flowing through the pipeline, the federal government would like nothing more than to sell it. But now Trudeau finds himself facing another dilemma as he struggles to build his credibility and popularity ahead of next year’s federal election.
If he sells TMX too quickly at a loss, he’ll be accused of wasting taxpayers’ money. If he waits too long hoping for a higher price, he’ll be accused of saddling taxpayers with a white elephant.
Like everything about Trudeau’s foray into the Trans Mountain expansion, he gets plenty of blame but not much credit.
For Smith, though, the sky seems to be the limit. She is arguably the luckiest premier in Alberta history. Not only did she become premier two years ago just when Alberta turned the corner from recession to oil boom, she inherited two constitutional victories in court against the federal government and her anti-carbon tax fight ballooned into a national movement with her as the de facto leader.
Under the cover of Alberta’s burgeoning economy, she is solidifying her position. And that spells trouble for anyone worried about unity at the national level and democracy in Alberta.
She is determined, for example, to push ahead with her plan for an Alberta Pension Plan, which would mean weakening the Canada Pension Plan by withdrawing a yet-to-be determined amount from the CPP.
Over the past few weeks, she has introduced legislation to undermine the autonomy of city councils in Edmonton and Calgary that, to Smith’s great irritation, are dominated by progressive politicians.
Smith’s government has trod on so many conventions that University of Alberta political scientist Jared Wesley labelled it “an authoritarian force” in a blog post this week under the headline, “The UCP is a threat to democracy: It’s time we stopped pretending otherwise and took action.”
Just one year after winning Alberta’s provincial election, Smith is flexing her political muscles; the completion of the TMX is like a shot of adrenalin.
Federal Conservative leader Pierre Poilievre should take note. Not only is Smith the dominant force in Alberta politics, she seems determined to become one on the national stage, no matter who is prime minister after the 2025 federal election.
