Canada’s Trudeau set for emergency summit on pipeline crisis

Canadian Prime Minister JustinTrudeau will on Sunday try to tackle an escalating dispute overa oil pipeline project that threatens to undermine his politicaland economic agenda.

Kinder Morgan Canada Ltd wants to almost triple thecapacity of its Trans Mountain pipeline from oil-rich Alberta tothe Pacific province of British Columbia, which strongly opposesthe idea on environmental grounds.

Trudeau – who says the expansion will benefit the economyand needs to proceed – is due to hold a emergency meeting at 10am ET (1400 GMT) with the premiers of both provinces.

"This is not about punishing British Columbians, this is notabout hurting Canadians, this is about bringing forward aproject in the national interest," he told reporters in Perulate on Saturday before returning to Ottawa.

"We will do it in such a way that doesn't seek to furtherpolarize or raise the temperature in this debate."

Although Trudeau's Liberal government could invoke emergencypowers to ensure the project goes ahead, that would most likelyanger voters in British Columbia and cost the Liberals supportin a federal election in October 2019.

But Trudeau is under increasing pressure from the businesscommunity and opposition politicians to take action amid fearsthe dispute could hit already flagging foreign investment.

"In the absence of a swift resolution to this issue, foreignand domestic investors will be left to question whether Canadais a suitable place to invest," said John Manley, President ofthe Business Council of Canada and a former Liberal financeminister.

Both the federal and Alberta governments have suggested theycould take a stake in the project.

"There are enough determined parties that a solution will bereached. It won't be easy – it's not an easy issue, none of thisis," a senior government official said ahead of the meeting.

British Columbia premier John Horgan told reporters onSaturday he wanted to protect his province against "thecatastrophic consequences" of a pipeline leak.

He wants Ottawa to refer the matter to the Supreme Court butthe Liberals are not interested, saying it is already clear thefederal government has jurisdiction over the project.

Horgan's office says he plans to speak to reporters at 11am, suggesting he will not be talking for long to Trudeau andAlberta premier Rachel Notley. Trudeau is set to face the mediaat 1 p.m.

(Reporting by David LjunggrenEditing by Nick Zieminski)