Newspaper article The Canadian Press

Alberta and B.C. Left with Limited Options to Escalate Trade War

Newspaper article The Canadian Press

Alberta and B.C. Left with Limited Options to Escalate Trade War

Article excerpt

What's next in the Alberta-BC dispute?

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CALGARY - British Columbia Premier John Horgan held off on ratcheting up a trade war with Alberta Wednesday, but experts say both provinces still have a few limited options to raise the stakes.

Alberta Premier Rachel Notley has already deployed some of the weapons in the province's arsenal to protest B.C.'s proposed restriction on bitumen shipments, when she announced a ban on B.C. wine on Tuesday and an end to talks on increased electricity imports last week.

The limits on B.C. wine were a viable target because provinces control the purchase of alcohol, said Trevor Tombe, an associate professor of economics at the University of Calgary.

"With booze, because it's a monopoly wholesaler owner by the government, it can easily change its purchasing decision."

Given the unique regulatory circumstances of alcohol, which are currently being challenged at the Supreme Court, Tombe points out that beer imports from B.C. would be another obvious target for retaliation.

While possibly less high profile than B.C. wine, Alberta imported about $58 million in 2014, the last year with data available from Statistics Canada, compared with $60 million in wine and brandy for that year.

B.C. could retaliate with its own restriction on importing Alberta beer, but as of 2014 the province only bought about $7 million worth of beer from Alberta.

Governments are, however, limited on putting restrictions or tariffs on most other goods that cross the border -- whether it's B.C. lumber or Alberta beef -- as those would be clear barriers to trade in violation of the constitution.

"That is completely illegal, and there is no ambiguity there," said Tombe.

Some have wondered about the more extreme option of shutting off existing Alberta oil and gas shipments westward to potentially drive up gas prices in B.C.

But even if it were effective, the Alberta government doesn't have control over the commodity and would need the co-operation of oil and gas companies.

Ian Anderson, CEO of Kinder Morgan Canada, the owner of the controversial Trans Mountain pipeline, which is trying to expand its route through B. …

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