By David Ljunggren
OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau will on Sunday try to tackle an escalating dispute over a oil pipeline project that threatens to undermine his political and economic agenda.
Kinder Morgan (NYSE:KMI) Canada Ltd (TO:KML) wants to almost triple the capacity of its Trans Mountain pipeline from oil-rich Alberta to the Pacific province of British Columbia, which strongly opposes the idea on environmental grounds.
Trudeau - who says the expansion will benefit the economy and needs to proceed - is due to hold a emergency meeting at 10 am ET (1400 GMT) with the premiers of both provinces.
"This is not about punishing British Columbians, this is not about hurting Canadians, this is about bringing forward a project in the national interest," he told reporters in Peru late on Saturday before returning to Ottawa.
"We will do it in such a way that doesn't seek to further polarize or raise the temperature in this debate."
Although Trudeau's Liberal government could invoke emergency powers to ensure the project goes ahead, that would most likely anger voters in British Columbia and cost the Liberals support in a federal election in October 2019.
But Trudeau is under increasing pressure from the business community and opposition politicians to take action amid fears the dispute could hit already flagging foreign investment.
"In the absence of a swift resolution to this issue, foreign and domestic investors will be left to question whether Canada is a suitable place to invest," said John Manley, President of the Business Council of Canada and a former Liberal finance minister.
Both the federal and Alberta governments have suggested they could take a stake in the project.
"There are enough determined parties that a solution will be reached. It won't be easy - it's not an easy issue, none of this is," a senior government official said ahead of the meeting.
British Columbia premier John Horgan told reporters on Saturday he wanted to protect his province against "the catastrophic consequences" of a pipeline leak.
He wants Ottawa to refer the matter to the Supreme Court but the Liberals are not interested, saying it is already clear the federal government has jurisdiction over the project.
Horgan's office says he plans to speak to reporters at 11 am, suggesting he will not be talking for long to Trudeau and Alberta premier Rachel Notley. Trudeau is set to face the media at 1 p.m.