This article originally appeared in the National Post.
By Jack Mintz and Janice MacKinnon, January 30, 2023
In Canada, both the federal and provincial governments have significant jurisdiction over climate change policy as it affects natural resources. Both levels of government share jurisdiction over the environment. The federal government has significant capacity to implement policies deemed in the national interest. And natural resources, including oil and gas, are under provincial jurisdiction. Thus, successfully reducing emissions requires co-operative federalism, whereby both levels of government work together to achieve common goals and respect each other’s jurisdiction.
While there are some examples of federal-provincial agreement on climate change initiatives that affect natural resources, the more common pattern is for the federal government to act unilaterally rather than collaborating with provinces.
What does it say about the state of co-operative federalism in Canada when all 10 provinces are supporting a legal challenge to the federal government’s Bill C-69 on the grounds that, “The federal government has unilaterally declared responsibility for all emissions regulation that overrides provincial jurisdiction” over areas such as resources?
The court battles, along with C-69 and Canada’s cumbersome regulatory processes for approving projects, have been significant hurdles to approving and completing major projects in Canada, which is very problematic for a country that has seen declining business investment and low growth projections relative to comparable countries.
As well as concern about Bill C-69, western provinces are concerned about the lack of federal support for liquified natural gas (LNG) export terminals since currently Canada’s natural gas is only sold internally or to the United States. Given the priorities to supply LNG to Europe and future energy-security needs, it is no surprise that the U.S. has seven operating LNG export terminals and three more under construction.
Canada, on the other hand, has not yet completed even one. Instead, the federal government has pushed green hydrogen, which, in August 2022, it said would be sold to energy-starved Germany, even though it is well recognized that hydrogen will not be a major source of energy for a decade or two to come. Notably, Germany later announced a 15-year contract to purchase LNG from Qatar beginning in 2026.
Canada is missing a golden opportunity not only to sell more natural resources at higher prices but also potentially to reduce global emissions by replacing Chinese coal as a source of energy. Instead, the western provinces are selling their natural gas at a discounted price to the United States, which in turn exports it abroad.
An excellent example of the lack of collaboration and co-operation between the two levels of government is the federal decision to cap and reduce greenhouse gas (GHG) emissions in the oilsands. There is a consensus among the industry and the provincial and federal governments that emissions in the oilsands need to be reduced. The major oilsands producers understand that achieving high standards on decarbonization are essential to their industry’s future global competitiveness.
Hence, the oilsands companies have formed the Pathways Alliance to enable them to work together to reduce their emissions. Similarly, the province supports decarbonization of the sector as part of its case that Alberta should be a supplier of choice for clean and secure energy. There is, then, a foundation for the three parties to work together to achieve the common goal of reducing emissions in the oilsands.
However, instead of seeking collaboration with the province, the federal government has acted unilaterally. The federal government’s decision to impose a cap on oilsands emissions was announced with no consultation with the province, a decision that was criticized by both the Alberta premier and the leader of the Opposition.
The federal government’s decision to establish differing emissions-reduction targets and time frames for various sectors of the economy is also problematic, as it feeds into historic concerns that federal governments with virtually no representation in the region impose policies on Alberta (and Saskatchewan) that are contrary to their interests.
In terms of the targets, the major oilsands producers committed to reducing their emissions by 30 per cent by 2030. The federal government had an opportunity to embrace that target and call on the province to work together on the plans and investments in technologies, like carbon capture, to make the target a reality. Instead, the federal government decided on an emissions-reduction target of 42 per cent, a goal that even a federal government analysis found was not feasible.
The Alberta government should challenge unilateral federal decisions that adversely affect Alberta’s natural resources, over which the province has constitutional jurisdiction. One option would be for Alberta to initiate a court challenge to the constitutionality of the federal government imposing differing emissions-reduction targets and time frames on various sectors of the economy, especially regarding natural resources.
Alberta could also consider asserting its provincial jurisdiction to counter federal measures, as Saskatchewan did under the NDP government of Premier Roy Romanow, which refused to enforce federal gun-control legislation. Alberta could follow the Saskatchewan example by exercising its control over natural resources in response to unilateral and unrealistic federal climate-change targets.
Canada has had nine climate plans since 1990 and has failed to hit any of the targets in them. However, the targets, especially for oil and gas, have discouraged investment and added to the global problem of skyrocketing energy prices. Alberta should make it clear that it will participate in any realistic plans to reduce GHG emissions from the oil and gas industry so long as they do not result in production cuts, which would merely shift oil and gas production from Canada to countries with lower decarbonization standards.
Alberta should also make it clear that if the federal government tries to impose unilateral and unachievable targets, the province will use its jurisdiction over natural resources to prevent the implementation of the federal targets.
Former Supreme Court Justice Jack Major recently supported the right of a province to refuse to implement measures that were “adverse to Alberta without consulting the province.” As Major explained, rather than the province taking the federal government to court to challenge legislation that the province deems unconstitutional, the “onus is reversed, and the federal government would have to bring the matter before the court.” Major concluded: “What’s so terrible about the province saying if you want to impose on us, you better be sure you’re doing it constitutionally.”
Another and perhaps preferable option is for Alberta to pass legislation detailing its own plan to reduce GHG emissions in the oilsands. The province could provide strategic direction and work with stakeholders to press the federal government to provide competitive financial support for carbon capture technology and timely approval of regulations.
The goal of the court challenges and the assertion of provincial jurisdiction over natural resources is not to build roadblocks to action on climate change. Quite the contrary. One of the many reasons why the federal government failed to achieve its many emissions-reduction targets is that it often acts unilaterally and ignores the benefits of working collaboratively with provinces and stakeholders.
The provinces need to push back to force the federal government to understand that the only way to achieve significant reductions in GHG emissions is through co-operative federalism, with both levels of government respecting each other’s jurisdiction and working together to achieve common economic and environmental goals.
Adapted from the paper, “Alberta 2023 and beyond: Fiscal policy, health care and federal-provincial relations,” written by Janice MacKinnon, former Saskatchewan cabinet minister, and Jack Mintz, president’s fellow at the University of Calgary’s School of Public Policy, for the Macdonald-Laurier Institute.
