Last week, Alberta Premier Danielle Smith made good on a promise that helped elevate her from the political sidelines to the most powerful leader in the province in the span of just a few months. Following last Tuesday’s throne speech, Smith formally tabled the Alberta Sovereignty Within A United Canada Act, 2022.
The bill’s stated purpose is to “reset the relationship with Ottawa,” and it vows to empower Alberta to “fight harmful federal laws and defend the constitutional federal-provincial division of powers.” In Smith’s mind, Albertans will be on equal footing with the rest of the country – haters be damned.
Prime Minister Justin Trudeau’s response? “I’m not going to take anything off the table, but I’m also not looking for a fight.”
But he may not have much of a choice. In a confederation where policy making depends on the provinces and territories working alongside the federal government, a bill like this is bound to spark conflict and spread uncertainty. Where is the relationship most likely to come to a head? Let’s take a look.
Environment and Climate Change
Alberta already has a rocky relationship with the federal government when it comes to the environment and climate change. Back in 2021, the Supreme Court ruled that the Liberals’ carbon pricing law was constitutional, dealing a major blow to Alberta’s legal challenge of the law being an intrusion on provincial jurisdiction. While it is now largely accepted that the carbon pricing issue is settled – at least legally, Smith has already indicated that she plans to challenge it once again. Will she attempt to take the issue back to the courts, or will she invoke the Sovereignty Act and refuse to collect duties on carbon emissions in the province?
And what about major oil and gas infrastructure projects, such as pipelines? That’s also a hotly contested issue. In 2018, the Liberals passed a law enabling the federal government to weigh in on major provincial construction projects (like pipelines) and assess their impact on social and environmental issues. That law was recently struck down by Alberta’s Court of Appeal and is now headed to the country’s top court. What will that mean for companies and investors who want to do business in the province, but are wary of the potential political risk involved?
Take it from Smith’s former leadership challenger and current jobs and economy minister Brian Jean. Just a few months ago, Jean called the Sovereignty Act “a constitutional hand grenade and a mere exercise in legal virtue signaling” and claimed that it “would create even worse uncertainty and would be a blow to an Alberta economy that is finally starting to create good jobs for ordinary Albertans.”
A Healthy Confederation
A second area that could be a source of trouble? Healthcare. While provinces and territories are responsible for managing their respective healthcare systems, they receive a large chunk of funding from the federal government via cash and tax transfers. But funding has long been the subject of federal-provincial squabbling.
As we speak, the Liberal government is embroiled in negotiations with the provinces over the future of federal health transfers – with premiers calling on the Prime Minister to pick up more of the tab. Meanwhile, Ottawa has said that if the provinces commit to improving the delivery of health services, agree to expand the use of common health indicators, and help build a world-class health data system, the feds will step up their financial support.
But so far, no progress has been made. Might Smith attempt to leverage the Sovereignty Act in order to coax the federal government into sending it higher health transfers? What would transpire if the federal government reached an agreement with the provinces, only for Alberta to renege on some of the conditions? And what impact, if any, will this all have on the rollout of the Liberals’ other health-related aspirations, including dental care and universal pharmacare?
Where Do We Go Now?
Alberta’s Sovereignty Act only raises the spectre of uncertainty within a series of volatile situations. Will Premier Smith’s gamble lead us down the road of a genuine constitutional crisis, or will it all come down to nothing more than a game of political chicken? Either way, the Prime Minister may have to brace himself for a fight – whether he likes it or not.
