Can Alberta just refuse to follow federal regulations?

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Jordan Heath-Rawlings As you may know, the federal government has some ambitious climate targets, and as you may also know, some provinces don’t agree with those targets, namely Alberta. But does that mean that when the numbers are in and the regulations are in place, that Alberta can simply say, Nope,

CLIP: The resolution tabled in the legislature Monday over the controversial Alberta sovereignty within a United Canada Act instructs provincial energy entities to ignore potential federal regulations if they are passed.

Jordan: This is the first test of the Alberta Sovereignty Act, and it probably won’t be the last Ottawa needs provinces to comply with its climate targets in Alberta says it won’t. That would, of course, set a fairly large precedent for other provinces to pass their own sovereignty acts and to defy the feds on whatever they want and then let the courts settle it. But does Alberta’s act have any teeth? Will it hold up legally? Is the province using this as a plan or as a bargaining chip? And will the federal liberals be willing to bargain or is this a fight that both sides might relish politically? I’m Jordan Heath-Rawlings. This is The Big Story. Rod Nickel is a reporter with Reuters who covers energy, agriculture, and politics in Western Canada with a particular focus on energy transition, which is in play here. Hello, Rod. Hello. Thanks for joining us today.

Rod Nickel: Happy to be here.

Jordan: I wonder if you can start, for those listeners that we have that don’t pay a ton of attention to politics in Western Canada by explaining what the Alberta Sovereignty Act is, where did it come from? When was it created and what’s it intended for?

Rod Nickel: Yeah, it’s a piece of provincial legislation that was passed last year. In Alberta’s view, it allows it to refuse to enforce federal laws that violate Alberta’s rights. Interesting to note, I guess Saskatchewan has approved similar legislation. They use slightly different language, and they say that their legislation is to defend their economic autonomy from federal overreach, but the principle is kind of the same. The legislation provides, I guess at least the appearance of a legal basis for Alberta to ignore laws that it essentially doesn’t agree with important. I guess to point out though, that some legal experts say Alberta can’t actually pass a law to defy federal law simply because it wants to.

Jordan: So I guess, is it fair to say then that what we’re going to talk about today is kind of a test of what Alberta can use this act for and what it can’t,

Rod Nickel: It’s, I guess, unclear whether there is much substance that will come out of this or whether this is just as some observers have described as political theater. This is the first test, I guess you could say, of the Sovereignty Act in the sense that the legislature has introduced a motion to use the act to defy the clean electricity regulations when they actually become legal. So in that sense, it is the first flexing, I guess, of the Sovereignty Act, but it’s still really unclear whether what this will actually result in real terms. We’ll,

Jordan: Take us back to last week then, when Premier Danielle Smith said that she would invoke the act over the clean electricity regulations. Yeah,

Rod Nickel: The trigger for it, I guess, was in August the federal government released their draft regulations for the clean electricity regulations. So these are not actually enforced yet. I think the target is for the feds to do more consulting with Alberta and with others industry and to actually finalize these regulations in early 2025. And they’re intended of course to produce a, as the feds call it a net zero electricity grid for Canada by 2035. Alberta is a province that relies still very heavily on natural gas, burning natural gas to produce electricity. Other provinces, Ontario, Quebec, they have hydro nuclear and Ontario’s case. So it’s much easier to reach those targets that the feds are setting than it is in Alberta. So that would be the trigger for this, that it’s more difficult in Alberta than in most other provinces to comply with this target than many of the other provinces.

Jordan: Why would Smith do it now then if these regulations are not official yet and they’re just kind of targets that are still being discussed?

Rod Nickel: Yeah, I think that may be part of the point that there is actual direct discussions underway between the feds and between Alberta. So you could look at this I think as maybe a case of trying to exercise some leverage. The final regulations will likely look a little differently than this. So Smith’s language last week was not, we’d like to see some changes to the regulations. It was, we hope the feds back down if that truly is what she’s looking for, or if she is looking for just some wins in terms of changes to the regulations that would suit Alberta, changes to the timeline that Alberta has to comply, that sort of thing. I mean, that would be a win for her as well. But that’s probably part of the backstory of why bring this up now

Jordan: If this act was actually invoked. I know you mentioned this is kind of something still for us to debate legally, but what would Alberta’s stated intention be to just invoke this act and then ignore the regulations and not comply and sort of try to leave it at that?

Rod Nickel: Yeah, exactly. So they would presumably pass this resolution. The UCP has a majority in the Alberta legislature, so there’s not much doubt that they could pass this resolution that would, you could look at it as a kind of fig leaf, I guess, or a kind of prop to say, look, we have some kind of legal basis to do what we’re going to do and we’re not going to comply with the clean electricity regulations. They would also create possibly a government power generator in Alberta, which it’s important to note they could do that without the Sovereignty Act. They could establish a crown power generator like many other provinces have of their own volition without passing this act.

Jordan: And if they did that, would that corporation be exempt from these regulations?

Rod Nickel: That seems to be Alberta’s position. I think that’s very much in question, whether just because it’s a provincial government entity, can it defy a federal law more easily than a private company could. Certainly the willingness might be there, like the politicians of the day could direct their own corporation to act in a certain way, but whether ultimately that would stand up in court is unclear. Really important to note the long timeline that we’re looking at here, because these regulations, even if they’re finalized in 2025, they don’t essentially take effect until 2035. So all the politicians, all the governments are going to change over that time. And whether we’re still talking about a net zero clean electricity grid in Canada in the same way by 2035 is pretty unclear. So it’s hard to see exactly what Alberta would actually be defying in the meantime.

Jordan: Well, let’s talk about maybe the bigger picture of what this means for the relationship between the province and the feds, and obviously anybody who follows Canadian politics knows that the Alberta Ottawa relationship is always a little bit fraught. Also, yesterday, premier Smith said that new oil patch methane rules from the federal government were unconstitutional. Is this the normal bickering between Alberta and Ottawa, or has something happened to deteriorate this relationship further?

Rod Nickel: Yeah, you could take a long view or a short view of this, and the long history as you refer to goes back at least to the 1980s where in Alberta and Ottawa, the liberal government of the day were fighting over the National Energy program at that point. And there’s been fights on and off ever since that oil and gas seems to be at the center of a lot of those fights. And the reason for it is oil and gas is really, really important to the Alberta economy. It’s also really important to the Canadian economy. So in that sense, wrestling for control of it is not that surprising. Now, I think the reason this is intensifying now is that Prime Minister Trudeau’s climate plans really hinge, really revolve around emissions from the oil and gas sector. It’s the highest emitting sector in Canada. Number two is transportation, which is also linked to the oil and gas sector. So it’s really central to what he wants to do on the climate file. And so I think from Alberta’s perspective, they’re seeing all of these initiatives come from the feds that really are targeting their sector and targeting control of it in some ways. So you’ve got the clean fuel standard, you’ve got the oil and gas emissions caps still coming up, the clean electricity regulations. Now, the carbon tax itself, really, all of these are aimed not just at the oil and gas sector, but definitely including it

Jordan: When we cover energy transition in other contexts, it is kind of seen as, yeah, maybe slow, but probably inevitable and the money is shifting. But in Alberta, we’re talking about not complying with these regulations. I know earlier this year we covered when Premier Smith paused renewable energy projects all across the province. How do you see Alberta’s position on the energy transition? Does Smith and does her government see all clean energy as a threat to Alberta?

Rod Nickel: Yeah, I don’t think so, and I guess I take a little more of a hopeful view of Alberta and its progress on the energy transition, just in the sense that obviously if they don’t get natural gas emissions largely out of their electricity grid, if they don’t deal with emissions from oil and gas production directly, federal climate plans aren’t going to go very far. But if you look at what’s happened in Alberta over the last number of years, they’ve made tremendous progress on curbing emissions. It was not too many years ago that a phase out of coal was the flashpoint between the federal and Alberta governments because it was seen as impossible or too fast. Well, Alberta is right on the cusp of eliminating their last coal-fired plants. You mentioned renewables. Alberta is the fastest growing renewable investment province in Canada, albeit it’s on pause right now because the premier wants to take a look at how those approvals happen, but it is still a province with tremendous solar and wind resources and a very fast growing industry. So even in looking at the clean electricity grid, the Premier isn’t saying, we won’t comply with this. She’s saying we can comply with this by 2050, not 2035. The generators, the power generators themselves, capital power is one that I’ve spoken to recently. Their target is 2045. So it’s not a completely philosophically different discussion or different aims that the province and the feds have, but there’s profound differences, the timing in what these clean electricity regulations should look like and who should be controlling it, who should be managing this? So Alberta’s position is that electricity is provincial jurisdiction, and they’re correct in that the feds are saying, well, emissions are in our purview and we’re just dealing with the emissions from electricity, not electricity itself. So that’s where some of the conflict comes in.

Jordan: You mentioned you’ve spoken to at least one of them. I’m interested in how the energy sector has reacted to the intent to use this act. And I mean, I know there’s some legal wrangling here, but aren’t they ultimately the ones who would not be complying with these regulations?

Rod Nickel: Yeah, so look, last week I spoke with one of the bigger power generators, capital power, and their concerns about the electricity regulations largely mirror Smiths. They think like Smith, that there’s a real risk of power blackouts and burnouts down the road if the regulations go through as they’re drafted, but they’re also working towards scrubbing emissions out of their system. So they’re also already moving along this path. I would say in general, the energy sector, the reaction has been a little bit muted. There seems to be a bit of a reluctance to talk publicly about this fight between Ottawa and Alberta because I guess these companies have to work with both levels. What you do hear a lot from the energy industry itself is the need for consistency for no sudden changes for a regulatory system, for a legal system that’s predictable. And that’s a comment that used to be that is often directed at the federal government for not creating the kind of predictability for investment in Canada and in Alberta that’s needed. But in this case, it could also be aimed at Alberta for pausing renewable approvals and bringing up the Sovereignty Act.

Jordan: I know it may be too early for actual polling on this, but do we know how Albertans in general feel about invoking the act? I feel, and this may be totally stereotypical on my part, that a majority of them might be happy to kind of stick it to Ottawa a little bit, but I’d love to know what they think.

Rod Nickel: Yeah, it’s a great question. I haven’t seen any recent polling data on using the Sovereignty Act. Certainly conservative politicians in Alberta seem to be using that assumption that fighting with Ottawa is just good politics in Alberta. Yeah, I’m not sure. I also hear in Alberta and across Canada and elsewhere as well, that there’s a lot of people that just want their politicians to get along when it’s in the interest of the greater good put aside partisanship. So I think there’s that element as well. I guess Smith’s gambit on the Sovereignty Act is leaning into the assumption that people like to see fights with Ottawa standing up to Ottawa as she would frame it, I guess we’ll see. What

Jordan: About the bigger picture, the political picture here? Is there a concern that, and yes, there’s the legal fight to happen if this is actually invoked, but is there a concern that this would lead to other provinces drafting similar legislation and being able to essentially invoke it in Tell Ottawa Lake? No, sorry, we’re not complying with that. There’s going to be a lot of climate regulations coming over the next couple decades, right? So this could be a precedent,

Rod Nickel: I suppose. I’m sure the federal government doesn’t like the picture it presents of provinces rebelling against their rule. I suspect they’re doing what we’re doing here and trying to think through what this could actually mean in terms of Alberta’s action or inaction against these electricity regulations. I think actually the bigger risk is really the courts exercising. This Sovereignty Act might not end up amounting to much more than a lot of noise, but court battles are an area where the feds have had mixed results that courts upheld their carbon tax, but they’re recently said that the Impact Assessment Act, the way that the Feds assess the environmental impact of big resource projects that the Feds had overreached there, essentially, it was too broad. So I think that the question is whether, if this does end up in court, would a court see at Alberta’s way that electricity is a provincial responsibility or the way the federal government is framing this, so that might be the bigger threat to the liberal climate plans than using something like the Sovereignty Act. What

Jordan: Are the actual next steps here? When might we see the act invoked? What would happen after that? And I guess you kind of touched on it earlier, but would there really be no settling this one way or another until 2035?

Rod Nickel: Yeah, I don’t see anything beyond talk happening in the short term. First thing that has to happen is the legislature passes this motion that is likely a slam dunk, and then I guess they get back to the table. So the Feds and Alberta have a working group specifically on clean electricity regulations. They’ll get back to talks whether Smith’s invoking of the Sovereignty Act, weighs shadows, overshadows those talks and alters them or influences them in some ways. I guess we’ll see. Have

Jordan: They said anything in Ottawa about this and whether or not it’ll make them reconsider or change their tone in these kind of talks?

Rod Nickel: I haven’t heard that. No, I haven’t heard that publicly, that yes, they’ll look at fundamental changes here. Although they have said publicly that they are working constructively with Alberta. They’re listening to Alberta and to the industry and to provinces across the country as well. So I think the disconnect is partly where Alberta says Ottawa isn’t listening. Ottawa says, at least behind the scenes that Alberta is not really meaningfully engaging in these talks so far. So there are talks happening, but whether they’re actually making any progress is another thing. So I guess we’ll see where those talks go. I think the next thing to watch for is the oil and gas emissions cap, which the feds are expected to come out with. Well, any day now around Cop in Dubai, that could be even a bigger battle than clean electricity regulations. When you consider that electricity nationally makes up only I think 9% of Canada’s emissions, whereas oil and gas is something around 28%. So it’s a much bigger battle potentially, and sort of another potential use of the Sovereignty Act.

Jordan: That was going to be my very last question for you, which is, I mean, you don’t pass an act like this, I guess, to just use it once and then put it away, but also I imagine you can’t kind of threaten to use it for everything. Where’s the balance here? What could Premier Smith be aiming for with this?

Rod Nickel: Yeah, I would think that there are at least considering using the Sovereignty Act on the oil and gas emissions cap as well, once they see the direction that the federal government wants to go with that. But you’re right, you can’t keep a saying, we’re invoking the Sovereignty Act and not have it come to any tangible steps in public before the voters start to think, okay, so start rolling their eyes a little bit when this is unveiled. So it’s a stick that she can use at least for a little while, I guess, and we’ll see what kind of implications it has.

Jordan: Rod, thank you so much for this. It’s complicated policy, and I’m glad to have you walk us through it here.

Rod Nickel: My pleasure.

Jordan: Rod Nickel reporting for Reuters. That was The Big Story for more including more energy policy, more climate policy, more about the dire future of our world. You can head to The Big Story podcast.ca. If you want to suggest an episode or offer us some feedback. We are always grateful to hear you out. You can find us on Twitter at The Big Story fpn. You can email us hello at The Big Story podcast.ca, or you can call us (416) 935-5935. The Big Story is available absolutely anywhere. Well anywhere you get podcasts. And of course, if you want it to play on your smart speaker, simply ask your smart speaker nicely if you want to play The Big Story podcast. Thanks for listening. I’m Jordan Heath Rawlings. We’ll talk tomorrow.