In letter to Trudeau, Kenney warns of 'devastating impacts' if Ottawa rejects Teck mine

Alberta Premier Jason Kenney is warning Prime Minister Justin Trudeau that rejecting Teck's proposed oilsands project would have "devastating impacts" on his province's economy and would further fuel western political alienation.

In a letter to Trudeau, hand-delivered to Deputy Prime Minister Chrystia Freeland last week, Kenney said he expects to see the project approved because its emissions would fall well below the 100 megatonnes cap Alberta has promised to impose on its oilsands sector as part of the pan-Canadian climate framework.

"There is, quite simply, no reason specific to this project that would justify denying federal cabinet approval for the Frontier project," Kenney said in a letter to Trudeau obtained by CBC News.

"Here in Alberta," Kenney wrote, a cabinet rejection "of our most important industry and could raise roiling Western alienation to a boiling point — something I know your government has been attentive to since the election."

The premier said he's frustrated by the fact that some Liberal MPs have suggested the provincial cap isn't the benchmark for approving natural resources projects any longer — that the federal government must decide instead whether the project is compatible with the government's goal of achieving net-zero emissions by 2050.

The Liberal Party promised in the last election campaign that, by mid-century, any carbon emissions in Canada would be completely offset by actions removing carbon from the atmosphere, such as planting trees.

Kenney said that when he's asked for details of Ottawa's plan to meet that net-zero promise, he's gotten "ambiguous shrugs" in response.

He said Ottawa has "not yet indicated a process for defining net zero."

"The simple truth is that Frontier easily fits within the existing greenhouse gas management framework agreed to by Alberta and Canada. As a matter of fundamental justice, your government cannot assess a project against a standard that does not yet exist, so we trust you will honour your previous commitments and satisfy existing expectations," Kenney said in his letter to Trudeau.

The Frontier Mine is a proposed 292-square-kilometre open-pit petroleum-mining operation in the northern reaches of Alberta. When fully operational, the mine is projected to produce some 260,000 barrels of oil a day and generate at least $12 billion in federal income and capital taxes.

The federal cabinet has until the end of February to decide on how to proceed.

Kenney said a rejection from cabinet would "send a signal to the international investment community that Canada's regulatory system is arbitrary, subject to moving and invisible goal posts, and that even the best evidence can be trumped by narrow politics."

Frontier got the green light from regulators in July 2019 after a joint panel of officials from the Alberta Energy Regulator and the Canadian Environmental Assessment Agency recommended the project receive the final necessary approval from the federal environment minister.

The panel concluded that, even if Frontier is built, Alberta would be able to keep emissions from the sector below the 100 megatonnes greenhouse gas emissions cap the former provincial NDP government imposed on the industry.  

Finance Minister Bill Morneau said Monday that cabinet has received the report from the joint panel reviewing the project but has not yet come to a final decision.

"We are going through a process, which has been a robust process, that will culminate in a cabinet decision on the project. It's not yet come to cabinet formally and for that reason I don't have anything more to say about that project at this time," Morneau said.

Kenney said the Frontier project, first proposed in 2011, would be a boon for Alberta's economy as the mine would create 7,000 jobs during construction and require up to 2,500 workers during operation. Teck has signed support agreements with all 14 local Indigenous communities.

The premier said Alberta is determined to help in Canada's larger climate change fight — the province is rapidly phasing out coal-fired power plants and recently imposed a carbon tax-like regime on large industrial emitters. But he said any further environmental commitments would be "much more challenging for Albertans if the federal government signals that it is saying no to future oilsands development."

In a hand-written postscript to the letter, Kenney said he was "happy to discuss this at any time" with Trudeau, adding the main goal of this advocacy is to ensure Canada "has a regulatory process that is not subordinated to politics."

Even if the project is approved by cabinet, Frontier faces an uncertain future. Donald Lindsay, the president and CEO of Teck, said his company needs "3 Ps" for the project to be viable: a partner to help shoulder the $20.6 billion construction price tag, the Trans Mountain pipeline expansion, and a better price for oil to make its development more viable over the long term.

"(It) is anyone's guess on what the federal government is going to do," Lindsay said last week at a CIBC Investment conference in Banff.