5 provincial spats over resources

Before the $5.5-billion Northern Gateway pipeline contract is even inked, not to mention approved by a federal panel, a heated quarrel has erupted between Alberta and British Columbia about divvying up the revenues.

It's not the first time in Canada that resources have spurred disputes between neighbouring provinces. And it likely won't be the last.

Here's a look at just a few examples of provincial spats, including the Alberta-B.C. one, over issues ranging from human to energy resources.

Northern Gateway pipeline

Alberta vs. British Columbia

In the dispute over the proposed Enbridge pipeline, B.C. is calling for a share in the project's revenue to compensate it for the potential environmental risks inherent in running a crude oil pipeline across its land. Alberta has refused to share royalties, citing a province's right to income from natural resources within its own borders.

The proposal involves two pipelines, stretching a combined 1,177-kilometres, that would carry 525,000 barrels of oil per day from the Alberta oilsands to the ports on the West Coast. Enbridge has estimated that public benefits would amount to $2.6 billion in local, provincial and federal tax revenues over 30 years of operation. Environmental groups and aboriginal communities have opposed the proposed pipeline, particularly over worries of an oil spill.

Upper Churchill Falls hydro project

Newfoundland vs. Quebec

Perhaps the most famous inter-provincial skirmish is the Upper Churchill Falls hydroelectric project. It's a battle that has raged between Quebec and Newfoundland and Labrador for more than half a century.

In 1969, Churchill Falls Labrador Corp. signed a deal with Hydro-Quebec that secured the creation of a power corridor through Quebec, enabling access to outside markets. In return, Newfoundland and Labrador agreed to sell a large portion of the electricity at a fixed rate until 2041 to Hydro-Quebec, the provincially owned utility.

The 65-year agreement did not account for inflation, nor the drastic rise in energy prices that was to come. Hydro-Quebec benefitted from the cheap price, profiting as it sold on the electricity to the U.S. and refused repeatedly to renegotiate the contract.

A 1996 report by Maclean's magazine found Newfoundland received $20 million a year by selling power to Hydro-Quebec, but the utility earned $800 million annually by selling that same power to hungry U.S. markets along the Eastern Seabord.

Since the 1970s, Newfoundland and Labrador has repeatedly tried to challenge the contract, seeking help from the federal government to the Supreme Court.  

Construction workers

Ontario vs. Quebec

In the late 1970s, Ontario and Quebec began a tit-for-tat dispute over construction workers crossing the border to work in each other's province.

Dubbed the Ontario-Quebec Construction War in some newspaper accounts, the tiff appears to have started when Quebec enacted restrictions in 1978 effectively barring Ontario construction workers from certain projects there. Ontario sought to retaliate with similar rules. Thus began a political dispute that lasted decades, flare-ups often fuelled by economic downturns.

Quebec's highly-regulated construction industry has historically deterred Ontario workers wanting to work in Quebec — while also driving Quebec workers into the more open Ontario.

Frustrated by the flow of workers into Ontario, Ontario enacted a Fairness is a Two-Way Street Act in 1999, barring Quebec construction workers from Ontario government projects. The two provinces eventually settled their differences in 2006 with a construction mobility agreement. 

Timber dispute

Ontario vs. Manitoba

In Canada's early days, as boundaries were still being carved out, Ontario and Manitoba clashed for years over a tract of land on the western and northern boundaries of Ontario that each claimed as its own. An 1883 New York Times article described "frequent disgraceful conflicts" that "stopped short of bloodshed."

The tract was rich in timber and minerals, and also contained a port on Lake Superior.

In 1880, Manitoba extended its boundaries, with the federal government confirming them the next year.

But Ontario did not agree, saying the extension gave the disputed area to Manitoba. Confusion reigned in the disputed area as it lacked not only civil courts and a registry office to record deeds, but a timber agent to protect the forest. The U.K. judicial committee of the Privy Council finally weighed in. In 1889, the boundary of Ontario was extended west of Lake of the Woods and north to Albany River. 

National Energy Program

Alberta vs. Ottawa (and Ontario and Quebec)

In the wake of the energy crisis in the late-1970s, when the OPEC nations raised the price of oil, the Trudeau government introduced the National Energy Program, basically to equalize the price of oil in Canada and offset higher prices being paid the central and Atlantic provinces.

Highly unpopular in Western Canada, particularly in Alberta where most of Canada's oil is produced, the NEP sought to increase the federal share of energy revenues and make Canada a self-sufficient oil producer. Alberta viewed the program as an intrusion into provincial control over natural resources, as set out in the British North America Act, then the country's constitution.

Peter Lougheed, the Alberta premier at the time, retaliated against Ottawa by cutting provincial oil production. The fight caused huge uncertainty in the oil patch and essentially pitted the Western province against Eastern Canada. Lougheed said the federal government effectively "weighed Alberta's needs for markets against the economic advantages to Eastern Canada, and decided against us."

Eventually Lougheed and Trudeau signed a revised energy agreement in 1981, whch rejigged the revenue-sharing arrangement and reduced the NEP export tax on Alberta.

In 1982, the Supreme Court of Canada ruled Ottawa couldn't legally tax provincially owned oil and gas wells and the last vestiges of the controversial program were scrapped after Conservative Brian Mulroney was elected in 1984.