Alberta
Group behind the Alberta Sovereignty Act pleased with Province’s strategy
Submitted by Free Alberta Strategy
The Alberta Sovereignty Within A United Canada Act – the new full name for the Sovereignty Act – was introduced to the Alberta Legislature on Tuesday.
Now that we’ve had a short while to digest it, we’re confident in saying that when it comes to protecting the interests of Alberta on the national stage, the Act is right on the money.
The Sovereignty Act, in practicality, is just a procedural bill – more or less just a framework for a free vote in the Legislature. It allows for a Cabinet Minister to introduce a motion about a “federal initiative” that the Minister believes to be unconstitutional on the basis of intruding into an area of provincial constitutional jurisdiction, or is otherwise harmful to Albertans, such as by violating Albertans’ rights and freedoms under the Charter of Rights and Freedoms.
The resolution would identify not only the “federal initiative” that is being addressed, but also specific “measures” that the government may use to push back.
The motion would then be debated on the floor of the Legislature, followed by a free vote of MLAs and – if the majority vote is in favour – the passage of the motion.
At this point, Cabinet is then tasked with implementing the specific “measures” identified in the motion.
The usual suspects have continued to claim that it’s unconstitutional for Alberta to insist that the federal government follow the constitution, and to refuse to help them enforce their laws when they don’t.
This was always a strange argument, but even more so now, given the bill explicitly says, right near the start:
Nothing in this Act is to be construed as (a) authorizing any order that would be contrary to the Constitution of Canada.
Some, however, have now finally come to understand the Strategy.
Take the National Post’s Carson Jerema, for example, who – just a few months ago – was attacking the Sovereignty Act.
Yesterday, he got behind it, in a piece entitled: “Surprise, Danielle Smith’s sovereignty act is very likely constitutional“…
This is hardly the Constitution-breaking plan, which Smith’s critics, myself included, warned about during her campaign for the UCP leadership. The characterization of the sovereignty act as a threat to the rule of law, which some critics are still expounding, is simply wrong. Jesse Hartery, a Toronto lawyer with expertise in federalism, says he has been frustrated by the debate around the sovereignty act because the proposal, as currently written “appears to be constitutional,” based on existing law.
“One government can seek assistance from the other, can co-operate with the other, but they can’t require the other to implement and enforce their laws,” he told me by phone Wednesday morning. “So the (Supreme) Court has never endorsed that, and in fact, there’s decisions where the court says: there’s no positive obligation on a province or the federal government to co-operate with the other.”
Of course, for those of you who’ve been following our work for a while, it’s not at all a surprise that the Sovereignty Act is constitutional!
It’s not a surprise to us, because this has been our argument for over a year – one that we’ve repeatedly explained in these emails, on social media, on traditional media, in virtual town halls, physical events, and more.
Provinces have always had the right to refuse to endorse federal laws, and to do so is not contrary to the Constitution of Canada.
The reality is that the attacks are nothing but political theatre from a group of politicians and critics that have been missing the mark on western alienation for years now.
We’ve seen how far the federal government is willing to go to impose their Laurentian views on the rest of the country. They’ve made a mockery of the political system over the past eight years, launching an all-out war on our energy industry that has landlocked our resources and destroyed our livelihoods. We all remember the dark days when unemployment was the highest in the country, debts were coming due, and suicide rates were high. None of us want to relive that.
The Sovereignty Act is absolutely necessary, and the fact that the Sovereignty Act is Bill 1 demonstrates that this new government has put standing up to federal overreach at the top of the priority list.
Its introduction has already caught the attention of the federal government, with Prime Minister Justin Trudeau saying that he isn’t “looking for a fight,” over the Sovereignty Act.
In his comments, there appears to be some awareness that bringing the hammer down on Alberta over this legislation would create potential issues in Quebec and Saskatchewan, with both provincial governments undoubtedly monitoring the situation in Edmonton closely.
The Alberta Sovereignty Within A United Canada Act has a purpose – to give Alberta a tool to protect against federal intrusions into provincial affairs. In passing this Bill, it appears that Premier Danielle Smith and her team hit all the right notes.
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From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
Authors:
Alberta
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