Parsing the symbols, signals and seriousness of Alberta’s new Sovereignty Act move

To show how opposed her UCP government is to Ottawa’s oil and gas emissions cap, Premier Danielle Smith said Alberta would use its provincial Sovereignty Act to bar energy companies from submitting emissions data to the federal government, and from letting federal employees onto their production sites.

These actions are “bold” in the government’s own words. They’d also potentially run afoul of federal law requiring data sharing, and companies’ own obligations to shareholders and investors.

But it’s worth considering how many switches would have to flip a certain way to reach this fraught point of provincial-federal standoff over data and where federal inspectors could literally stand:

1. The draft oil and gas emissions cap — which the province and other critics say would force production cuts — would have to be enacted into law, either as soon as this spring or (given the typical pace of consultation periods and deliberations) next fall.

2. The Liberals would have to reverse a large and longstanding popularity deficit to win re-election next year to keep this climate policy in place, or a Poilievre Conservative government would have to reverse its own intentions to ditch the emissions cap if elected.

3. The cap would have to survive the provincial government’s promised constitutional challenge; Smith has matter-of-factly declared it unconstitutional, while some experts question whether it would survive the courts.

4. Then, assuming all the other switches have been flipped correctly, we may have to wait, since the first emissions data disclosure isn’t required until June 2027.

There’s another condition:

5. That the Smith government is actually serious about these Sovereignty Act measures.

It would indeed be a highly serious action for the province to, under the pretence of ownership of all natural resources, declare that all producers’ greenhouse gas emissions are “proprietary information and data that are owned exclusively by the Government of Alberta.” (This is from the draft text of the Sovereignty Act motion headed for legislature debate next week.)

And that would have serious implications for the companies that find themselves caught in the legalistic jurisdictional crossfire. These governmental declarations about this provincial bout of data sovereignty were reportedly news to a major industry group that says it hadn’t been consulted in advance.

Consider this

While the draft motion text lays out these bold/serious actions, it tasks cabinet to “consider the following responses to the federal initiative.” Environment Minister Rebecca Schulz confirmed to CBC News that the Sovereignty Act motion “sets forward seven things we would like to look at” (italics ours, in both passages).

What would follow, she explained, would be to “come up with the fine-tuned details with constitutional experts, and with companies and organizations.” This would entail figuring out how to thwart federal rules on inspection and data disclosure, should it ever actually come to that point in 2027 and beyond.

There has always been this tension between the Smith team’s ambition of a mighty Sovereignty Act to declare Alberta a no-go zone for disagreeable federal laws, and the reality that federal laws apply in the zone called Alberta.

Rob Anderson had conceived of the Sovereignty Act before becoming Smith’s top adviser when she entered the premier’s office.

In early 2022, he imagined Alberta could use it to defy the consumer carbon tax. “We’ll even go further than that — we will not licence any business that charges the carbon tax within the province,” he suggested to a rather noteworthy interviewer.

When Smith and Anderson obtained power, they reined in their imaginings that the act could be used to defy Supreme Court rulings (on the consumer carbon tax, say), while the legislation itself declares nothing in it would authorize an order contrary to the Constitution, and could compel no person (“other than a provincial entity”) to violate federal law.

The first time the premier invoked the Sovereignty Act, against the Clean Electricity Regulations, the motion passed last year said any officials’ non-compliance with federal enforcement could not break federal laws and she admitted it was all essentially symbolic.

In this new invocation it also states that provincial entities can only act “to the extent legally permissible.”

WATCH | Danielle Smith threatens use of Sovereignty Act over emissions cap:

But blocking companies from directly reporting their carbon emissions to Ottawa — something they already do, for general monitoring purposes — would be pushing them to violate the law, federal Environment Minister Steven Guilbeault pointed out this week. Schulz, for her part, shrugged that off, saying that everyone should know that the federal cap will be found unconstitutional.

It will be, of course, up to courts to vindicate or reject the Smith government’s confident assertions about constitutionality. And should it ever come to it, the federal government or others could also hold Alberta’s Sovereignty Act up for constitutional scrutiny.

Two years into its existence, that flagship bill of Smith’s premiership has been invoked twice against the Trudeau government’s climate regulations, though neither regulation has actually become law so there is no co-operation yet requested of Alberta officials to defiantly withhold.

But it continues to draw headlines as a provocative measure, and underlines the extent to which the Smith government and its resource industry see these federal policies as dangerous to the viability of the oil and gas sectors and the broader Alberta economy.

The Sovereignty Act also signals how far the Smith government would go in the name of federal defiance, making proprietary demands of corporate data and controlling the rights of non-employees to visit company facilities.

The UCP government’s response to alleged federal overreach is to itself reach farther into business activities as a provincial government.

“Is this a conservative government?” NDP Leader Naheed Nenshi asked in response. “Is this a government that believes in free enterprise?”

Smith has stated repeatedly these are only measures she feels forced to take in response to heavy-handed federal proposals. Having garnered headlines and federal responses to the provocations, the next desired effect is the abandonment of the proposals, either by the Liberals or their successors.

A secondary proposal of Smith’s new Sovereignty Act push envisions a different sort of provincial government empowerment. Her new motion would have the province begin to directly sell oil and natural gas to foreign purchasers by collecting more royalties as in-kind petroleum products rather than cash — a return to a practice the province handed off decades ago to private resource producers.

Smith mused about the opportunity to secure long-term supply contracts and other orders that some foreign buyers have proposed but private companies haven’t been interested in inking.

She’s referring to how countries like Saudi Arabia, Venezuela and Iran use state-owned oil entities to sell their crude. 

“Governments like to deal with other governments,” the premier said, weeks after a trip to Abu Dhabi, the capital of another big monopoly oil exporter.

When she wielded the Sovereignty Act against the federal power grid rules, she proposed another expansion of provincial power — in that case to create a Crown corporation to operate natural gas-fired power plants that the private sector might walk away from under new green-power impositions.

Are these threatened actions to thumb the provincial nose at Ottawa, or are these new kinds of ambitions from a premier who wants a more direct hand in guiding Alberta’s resource development and markets?

Border implications

This announcement of Sovereignty Act powers (be they real or hypothetical) comes the same week that U.S. president-elect Donald Trump proposed another potentially existential threat to Alberta’s oil exports, in the form of 25 per cent tariffs on everything Canada ships south.

The discussions swirled about how to understand his words. Threat? Negotiating tactic? Real measure with real implications worth seriously considering?

It’s entirely possible we never see the United States slap a massive tax on all Canadian imports, or some bureaucrats in Edmonton become the new clearinghouse for all fossil fuel companies’ methane and carbon dioxide records.

But whenever an elected leader sets forth a plan with significant actions, one must attempt to figure out how to properly address it, or at least process it.