Alberta
‘Canada should be bold and more intentional…and respond to a world thirsty for more Canadian-made energy, food and critical minerals’
From the Canadian Energy Centre
Bare minimum amendments to Impact Assessment Act ‘do little’ to address Supreme Court’s concerns
One year ago, the Supreme Court of Canada found the federal government’s law to assess major projects like pipelines and highways breaks the rules of the Canadian constitution.
There’s a good chance it still does, despite amendments enacted this spring.
Lawyers with firms including Osler, Hoskin & Harcourt, Bennett Jones and Fasken have warned that Ottawa’s changes to the Impact Assessment Act (IAA) leave it open to further constitutional challenges.
One could come from Alberta as soon as November 1, following a four-week deadline set by Premier Danielle Smith for the federal government to address the province’s concerns.
“I don’t think that the amendments have responded adequately to the Supreme Court of Canada’s decision,” says Brad Gilmour, a partner at Osler, Hoskin & Harcourt who co-argued Alberta’s successful 2023 reference case to the Supreme Court.
The governments of Ontario, British Columbia, Saskatchewan, Quebec, Newfoundland and Labrador, New Brunswick and Manitoba supported Alberta’s case, arguing that the IAA had exceeded federal jurisdiction.
The Supreme Court largely agreed, while allowing that there is a place for federal assessment of major projects.
“The court had some significant concerns about federal overreach into areas of provincial jurisdiction, and I think that the amendments have done really little to address that broad concern,” Gilmour says.
“They’ve made very minor changes to the sections that the courts found to be unconstitutional, and the wording they use lacks clarity and lacks certainty.”
Components of the IAA that the Supreme Court found unconstitutional include the decision that starts the process – whether a project requires a federal impact assessment and the decision at its conclusion – whether or not a project should receive final approval to proceed.
“It appears the government has done the minimum possible to address the Supreme Court’s concerns, adding qualifiers to its areas of authority, but failing to correct the legislation’s negative impacts on the pace, cost and efficiency of project approvals,” wrote the Business Council of Canada’s Michael Gullo and Heather Exner-Pirot.
“Canada can’t wait and should be bold and more intentional in its effort to grow market share and respond to a world thirsty for more Canadian-made energy, food and critical minerals.”
According to Gullo and Exner-Pirot, the negative impact of the IAA legislation, which came into effect in 2019, can be seen in Canada’s national inventory of major resource projects.
In 2015, there were 88 energy projects completed with a value of $53 billion. In 2023, that figure halved to 56 completed projects with a value of $26 billion.
Alberta’s government says it has “made repeated requests” for the federal government to consult with the province on the amendments, to no effect.
“Alberta is not taking their foot off the pedal in pushing back,” Exner-Pirot told CEC.
“Our country’s energy and natural resources cannot be developed in a timely and economic manner under the current federal regulatory regime. This is affecting not only the economy, but also our security and our efforts to move to lower emitting energy sources.”
Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:
“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.
“This is precisely what I have been advocating for from the U.S. administration for months.
“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.
“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.
“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.
“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”
From the Fraser Institute
By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.
Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.
In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.
Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).
Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.
The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.
Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.
Jock Finlayson
Senior Fellow, Fraser Institute
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