Alberta's Sovereignty Act passes third reading, NDP claims it 'harms' investor confidence

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It's official: Bill 1, the Alberta Sovereignty Within a United Canada Act, passed its third and final reading in the legislature early Thursday morning and is set to receive Royal Assent.

"Our country works because we are a federation of sovereign, independent jurisdictions," said Alberta Premier Danielle Smith. "They are one of those signatories to the constitution, and the rest of us, as signatories to the constitution, have a right to exercise our sovereign powers in our areas of jurisdiction."

On Monday, the province clarified that changes to existing legislation are not addressed by the powers under the bill and would instead be made through the usual legislative processes. A motion under Section 3 recommends changes to legislation brought forward as a bill to be considered by the legislative assembly through the normal processes of the first reading, second reading, committee of the whole, third reading, and royal assent.

The powers given to cabinet to make amendments are limited to regulations and do not include the authority to amend legislation. The specific changes proposed to provide this clarity and certainty are:

• In Section 4(1)(a)(i) and (ii) reference to "enactment" is changed to "regulation."
• A definition of "regulation" is added as Section 1(f). That duplicates the definition of "regulation" found in the Interpretation Act and does not include an act of the legislative assembly.
• For greater certainty, a new Section 4(4) states that "regulation" does not include an act of the legislative assembly.

Ultimately, Bill 1 provides a legal framework to fight 'unconstitutional' or 'harmful' federal laws or policies that negatively impact the province, including those that overreach and interfere in provincial jurisdiction. According to Sections 92 and 92A of the constitution, provinces can make laws on matters concerning but not limited to firearms, energy, natural resources and COVID healthcare decisions without federal interference.

However, another proposed amendment to Bill 1 significantly narrowed the potential scope of that harm as outlined in Section 3(b)(ii) of the legislation. Expressly, harm will be limited to either "an effect on or interference with an area of provincial legislative jurisdiction" or "interference with the charter rights of Albertans."

The final vote on the amendments to the Sovereignty Act passed resoundingly 27-7. Unsurprisingly, the Alberta NDP voted against the amendments and the bill at all three readings.

"So let me get this straight, we have a Liberal appointee... Who is not even from Alberta... Coming to Alberta to tell us how to run our affairs?!"#cdnpoli #abpoli #ableg pic.twitter.com/8ZqkGgG2vR

— Danielle Smith (@ABDanielleSmith) December 8, 2022

During a legislative debate on Wednesday, NDP leader Rachel Notley contested that "[the Sovereignty Act,] amended, or not, will harm our economy."

According to a Fraser Institute survey, senior energy executives attributed "unpredictable provincial governments" to discouraging significant capital investment into energy infrastructure. 

ATB Financial Deputy Chief Economist Rob Roach said he expects a 20% jump in oil and gas extraction capital spending next year and another 5% in 2024. However, he expects investment to "hit [the] wall after next year" because "without more pipelines, you just can't keep expanding production."

Job-killing Sovereignty Act must be immediately referred to the courts https://t.co/Yrj42SlYDD

— Rachel Notley (@RachelNotley) December 8, 2022

Notley held a press conference Thursday afternoon denouncing the Sovereignty Act as 'destabilizing' to the economy and investor confidence in the region. "We cannot afford to have Smith's job-killing Sovereignty Act inject chaos into our province … so today, we are calling on Danielle Smith to refer this act immediately to the Alberta Court of Appeals for ruling on its constitutionality before it is proclaimed into law."

Notley also claimed the UCP is attempting to override Canada's constitution with Bill 1.

But Smith attributed more lavish capital spending by Cenovus Energy next year — to the tune of four to four-and-a-half billion — as a reason not to legitimize NDP' fear-mongering.'

Alex Pourbaix, the president and CEO of Cenovus Energy, said, "I suspect those initial comments were directed at ensuring legislation maintains investor confidence. At this point, I have not heard anything from investors worrying about it."

Smith previously said relitigating the Supreme Court of Canada on the federal carbon tax could address the province's rising cost of living concerns if successful. "We have new information. We have a war in Ukraine. We have a global world increase in prices. We have global instability. We have an affordability crisis."

The premier ensured her government would meet all constitutional and legal requirements before challenging perceived federal overreach and would respect court decisions if a response is contested successfully. A resolution under the bill would still include an opinion that a federal initiative is either unconstitutional or causes or is anticipated to cause harm to Albertans.