Danielle Smith vowed to use the Sovereignty Act. Now that she did, what’s next for Alberta and Ottawa?

There. Boom. After repeatedly warning she would, the premier has wielded the Sovereignty Act, designed to keep Ottawa from encroaching on the province's right to produce its oil and gas resources, or in the case of the electricity sector, burning them to keep the lights on.

The Alberta premier who demands Ottawa stay in its legislative lane is playing the role of a court justice.

It's typically a judge's role to reach an opinion about whether a federal measure is or isn't unconstitutional — and sure, a politician is free to rhetorically insist that is so before any court rules.

But Premier Danielle Smith is now having the Alberta MLAs declare that the provincial legislature isof the opinion that Ottawa's green power rules are unconstitutional.

It's uncharted territory, of course, but that was always the first provocative thing Smith's Sovereignty Act would do, if ever actually invoked.

As for what that actually means on the ground, how Alberta would create some sort of jurisdictional force-field to defy a meddlesome Ottawa? That's the other part of what a Sovereignty Act invocation is supposed to do.

So let's inspect the pointy end of the UCP government's stick.

Shield and Crown

Smith's proposed action plan against this alleged unconstitutionality is basically twofold.

First, Alberta would decree that the government or any provincial agency would, "to the extent legally permissible, refrain from recognizing the constitutional validity of the federal initiative," or from helping implement or enforce it in any way possible.

The qualifier about limiting action (or inaction) to what is "legally permissible" suggests there would be no brazen refusal by any provincial official to refuse to carry out their legal duties or roles, but do what they'd be legally allowed to do even if the Sovereignty Act wasn't wielded.

It's worth keeping in mind the nature of Ottawa's draft electricity emissions regs, which aim to decarbonize all provincial grids in 2035. They're still in draft form, likely to be finalized sometime next year, so there's nothing for provincial officials to implement now or any time soon; and there would also be nothing to enforce until that 2035 date when Clean Electricity Regulations are supposed to take effect.

But a provincial order to regard the regulations as invalid could mean provincial agencies are barred from preparing for the major changes Ottawa's limits on natural gas power generation would bring, energy economist Andrew Leach notes. Somebody would need to do that planning work to help Alberta companies figure out how to comply with federal policy, because no Sovereignty Act or any other provincial declaration will shield the power producers from that responsibility.

WATCH | Smith's announcement sets up showdown between Alberta and Ottawa:

Alberta invokes Sovereignty Act over net-zero electricity grid regulations

6 hours ago

Duration 2:01

Featured VideoAlberta is looking to sidestep proposed federal regulations for a net-zero electricity grid by 2035 by invoking its Sovereignty Act, a controversial law the United Conservative government passed last year but until now had never been used.

This leads to the other measure Smith unfurled as part of Monday's expression of impatience with Ottawa's power strategy, one that would surprise Albertans who thought they elected as premier an avowed libertarian, or who knew she had a Sumerian symbol for "liberty" tattooed on her arm.

Smith announced her UCP government will consider creating a new provincial agency that would be in the business of building new natural gas plants or buying existing ones from private companies, in the name of keeping Alberta electricity abundant and affordable. She'd create a Crown corporation to bolster the juice that privately owned (or in Calgary-based Enmax's case, city-owned) plants generate.

Asked whether this amounts to nationalizing the province's power sector, Smith insisted that it's no different from having the provincially owned ATB Financial in the mix of other banks and financial institutions that operate in the province. (More controversially in these parts, Petro-Canada was created as an oil-producing federal Crown agency competing with private players in the 1970s, when the provincial government also started the Alberta Energy Company for similar purposes.)

Smith has already shown that she's not above nationalizing private Alberta companies or assets if the moment demands it. In August, her government announced that the provincially owned Alberta Precision Labs will take over all staff, operations and facilities of DynaLife, after the private contractor hired under former premier Jason Kenney struggled to perform as promised.

Nuclear, too

The Alberta government would only step in to build or operate natural gas plants that wouldn't meet standards under the proposed federal rules, or operate ones that private companies deemed too financially risky to run, Smith said. "This should be a wholly owned entity of the province and it would operate in the market where it is needed as a generator of last resort, not first resort," she told reporters.

Smith also proposed that this provincial electricity company could partner with companies on nuclear power projects, which would already be zero-emissions so not hampered by what the Trudeau government is devising — but they would be expensive, and the sort of project that other provinces like Saskatchewan and Ontario would probably build through a Crown agency.

The premier didn't need her Sovereignty Act to explore dabbling in public-sector electricity generation. In fact, Canadian Press reporter Dean Bennett's pressing of this point in Monday's news conference led to this extraordinary exchange:

Bennett: So basically the answer is you don't need the Sovereignty Act for any of this. What it does, though, is that it actually draws more attention to it.

Smith: Sure.

Bennett: But that's not what the Sovereignty Act was supposed to be about.

Smith: What did you think the Sovereignty Act was supposed to be about? Of course it was.

She has spent much attention, political energy and provincial advertising dollars trying to publicly persuade Ottawa to scrap its target for a net-zero grid by 2035. With negotiations on these draft regulations still ongoing, and no timeline for their completion, it seemed a component of Smith's timing was her trip later this week to the COP28 global climate conference in Dubai, where she and federal Environment Minister Steven Guilbeault would wind up saying vastly different things about how rapidly Canada could fully green its power sector.

Oil and gas cap development update

17 days ago

Duration 4:25

Featured VideoEnvironment Minister Steven Guilbeault and Energy Minister Jonathan Wilkinson speak about the development of regulations to impose a cap on oil and gas emissions. Both ministers spoke at the third annual climate conference co-hosted with the Net-Zero Advisory Body and the Canadian Climate Institute on Nov. 9.

And even as she throws down this Sovereignty Act gauntlet, Smith told reporters she won't leave the negotiating table or federal-provincial working group to hammer out final rules for energy/climate measures such as this one. In fact, federal Natural Resources Minister Jonathan Wilkinson said officials from both sides have discussed this four times in recent months, and seemed to be making progress.

"I think we were actually headed toward finding a pathway to doing this in a way that would work for Alberta and for Canada," Wilkinson told CBC's Power and Politics.

Smith has said there was no satisfying breakthrough in sight, and so she had to invoke the Sovereignty Act this week as a "last resort." However, she further complicated matters by also saying Alberta might take the federal government to court on this matter.

Only once Ottawa's electricity regulations are no longer in draft mode could Smith find out whether a court will agree with Alberta's legislature about the constitutionality.

That would likely settle matters more clearly than most of what's happening this week could accomplish.

Power and Politics41:51Alberta premier to invoke Sovereignty Act on federal electricity rules

Featured VideoNov. 27, 2023 – The Alberta government plans to invoke its Sovereignty Act for the first time to shield the province's power companies from proposed federal clean electricity regulations. Power & Politics hears from Premier Danielle Smith on what drove her to take this step. Plus, Toronto uploads oversight of the Gardiner and Don Valley Parkway highways to Ontario as part of a new billion-dollar funding deal. We hear from Ontario Finance Minister Peter Bethlenfalvy.