Battle over pipeline to divide Canada's left, weigh on Trudeau

Commodities & Futures
© Reuters. FILE PHOTO: Crude oil storage tanks at the Kinder Morgan terminal in Sherwood Park© Reuters. FILE PHOTO: Crude oil storage tanks at the Kinder Morgan terminal in Sherwood Park

By Andrea Hopkins

OTTAWA (Reuters) – Messy political infighting over a pipeline threatens to divide Canada's left just as it gears up to name a new leader to face Prime Minister Justin Trudeau, jeopardizing the New Democrats' chances of gaining power-broker status in the 2019 election.

A New Democratic Party-led alliance set to take power in Canada's Pacific province of British Columbia vowed on Tuesday to block Kinder Morgan (NYSE:) Inc's plans to expand an oil pipeline, setting up a fight with energy-rich Alberta and the federal government. [nL1N1IW0KU]

The brewing battle between the only two provincial NDP governments in Canada is bad news for the party, which should have been basking in a surprise ascent to power in the country's third most populous province.

Instead, it has exposed the party's gulf over energy and the environment, setting the stage for a potential pitched battle between two sides of a party that must unite if it hopes to unseat Trudeau's Liberals or become, at least, kingmakers.

“This could be the key dividing line between passionate environmentalists and economic pragmatists in the party,” said pollster Nik Nanos of Nanos Research.

While both Trudeau and the Alberta NDP government support the project, the NDP divide runs up the party line to Ottawa, where six candidates vying for leadership of the third-place federal NDP have varied views on pipelines and the economy. The party will elect its new leader in October.

The western battle over the pipeline expansion, designed to carry crude from Alberta's oil sands to the west coast, also poses potential risks to Trudeau, who had scored a rare political victory with a pipeline policy that balanced demands of energy-dependent Alberta and the environmentalists in his party.

“If you are a Liberal, you have to be worried that the fight within the NDP could spill over to a fight within the Liberals,” Nanos said.

A political battle between NDP governments has rarely been a risk in Canada, where the Liberals or center-right Conservatives traditionally hold federal power and the NDP has been able to be principled and uncompromising in opposition.

“It's complicated,” acknowledged Karl Belanger, a longtime senior adviser to NDP leaders, saying the tension building between the provincial NDP leaders in Alberta and British Columbia will soon force the federal leadership candidates to pick a side in the pipeline debate.

“The energy file has always been a sensitive one … but eventually the federal candidates will have to take a stronger stand and clarify their positions,” said Belanger.

While renewed opposition to the pipeline could hurt Trudeau, disarray among his rivals on the left could also benefit the prime minister just as the Conservatives solidify under new leader Andrew Scheer, said Queen's University political history professor Christo Aivalis.

“The perceived fighting or division within the NDP could allow Trudeau to say: 'I have a solid unified party, and we are the best way to stop social conservatives.' That's a narrative that could be effective,” Aivalis said.

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