EDMONTON — A fight between Saskatchewan and Alberta over licence plates in construction sites is over.
The Saskatchewan government issued a letter Monday that said the province is suspending a policy it imposed in December that banned vehicles with Alberta licence plates on government construction projects.
Alberta Economic Development Minister Deron Bilous said Saskatchewan had little choice, because it was facing millions of dollars in fines for contravening free-trade rules under the New West Partnership trade agreement.
"Saskatchewan was offside on this," Bilous said in a conference call from Whitecourt, Alta.
"(They knew) they were going to lose when it came to the (free-trade) tribunal, so they've done the right thing in the 11th hour."
Monday was the deadline to lift the ban. The move came just hours before a free-trade panel with the power to levy fines up to $5 million was to begin investigating.
Bilous said Alberta did not make any agreements or concessions that led to the decision.
Saskatchewan Trade Minister Steven Bonk said in the letter that his province was heartened when Bilous said last week that Alberta would abide by a panel decision on a separate trade dispute over funding for Alberta craft brewers.
"Thank you for your commitment to honour the upcoming appeal panel's findings," wrote Bonk. "In good faith we will suspend the licence plate policy ... immediately."
Alberta officials have never said they would not abide by the pending ruling on whether tax changes and subsidies for Alberta craft brewers violate interprovincial free-trade rules.
Bonk was to speak with reporters later Monday.
Saskatchewan initially argued it was imposing the licence ban in response to similar restrictions facing Saskatchewan workers on Alberta job sites. Alberta said that was not true and Bonk never provided evidence to back up the claim.
As the war of words escalated, Saskatchewan Premier Brad Wall stepped in and said the plate ban was in response to anti-free-trade initiatives by Alberta.
Alberta filed a legal challenge under the New West deal, but both sides still agreed to meet in Lloydminster — on the boundary between the two provinces — to hash out trade concerns.
The two sides still want to meet and have set a date of Jan. 31. But Saskatchewan wants to hold it in Medicine Hat, Alta., which is closer to Regina, while Alberta insists on Lloydminster.
It's the second time in 10 months that Wall's government has walked back on free-trade incursions into Alberta.
Last March, Wall sent letters to oil companies in Calgary. He offered incentives such as relocation costs and help finding office space if firms would move to Saskatchewan.
After Alberta Premier Rachel Notley threatened to take the issue to arbitration as a violation of free-trade rules — and hinted at retaliatory measures — Wall's government sent followup letters to the oil companies stressing the province couldn't violate trade agreements.
The ongoing spat underscores the bad blood between Notley and Wall, particularly as it relates to rehabilitating their non-renewable, resource-based economies.
As late as last week, Wall and Notley were publicly sniping at each other. Wall has criticized Notley's decision to rack up debt and deficits to help revive Alberta's finances, while Notley says Wall's austerity budgets have made a bad situation worse in his province.
Wall is leaving politics, however, and Saskatchewan Party members are to pick a new leader — and premier — on Saturday.