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Alberta

Fortis et Liber: Alberta’s Future in the Canadian Federation

Published

6 months ago

43 minute read

From the C2C Journal

By Barry Cooper, professor of political science, University of Calgary

Canada’s western lands, wrote one prominent academic, became provinces “in the Roman sense” – acquired possessions that, once vanquished, were there to be exploited. Laurentian Canada regarded the hinterlands as existing primarily to serve the interests of the heartland. And the current holders of office in Ottawa often behave as if the Constitution’s federal-provincial distribution of powers is at best advisory, if it needs to be acknowledged at all. Reviewing this history, Barry Cooper places Alberta’s widely criticized Sovereignty Act in the context of the Prairie provinces’ long struggle for due constitutional recognition and the political equality of their citizens. Canada is a federation, notes Cooper. Provinces do have rights. Constitutions do mean something. And when they are no longer working, they can be changed.

Mahatma Ghandhi was once allegedly asked what he thought of Western civilization. “I think it would be a good idea,” he is said to have replied. One could answer the same about Canadian federalism: it would be a good idea.

Not too long ago I was interviewed by a CBC journalist from Toronto regarding the Alberta Sovereignty within a United Canada Act, which upon its introduction by Premier Danielle Smith’s UCP government in November 2022 was attacked as needlessly provocative, deeply unconstitutional, legally unsustainable and shamelessly populist. “What is your vision of Canada?” the CBC reporter wanted to know. I told her the following: that Canada might be a federation. The implication was obvious: Canada is not a federation at present and, arguably, never has been. Many Canadians would find such a remark not arguable but outrageous. So here is my argument. My focus is on the Prairie West, not Laurentian Canada, the Maritimes, Newfoundland or B.C., each of which retains the story of its connection to Canada.

For 200 years Rupert’s Land (its flag shown on top left) along with the Northwest and Northeast Territories were the exclusive commercial domain of the Hudson’s Bay Company (HBC), granted by the British Crown; Great Britian officially transferred these vast lands to the Crown in Right of Canada in 1870. (Source of map: Golbez, licensed under CC BY 2.5)

Before Canada became a country in 1867, the vast tracts administered by the Hudson’s Bay Company – Rupert’s Land and the Northwest and Northeast Territories, including what became Labrador – were governed from London under Imperial orders and statutes. In law, Rupert’s Land was a plantation – a cold-weather plantation, to be sure, but a plantation nevertheless. The transfer of Company lands from the Imperial Crown to the Crown in Right of Canada took place by means of an Imperial Order-in-Council (passed under appropriate statutory authority) on July 15, 1870.

This all-but-forgotten history is important for understanding our present discontents. Not only was Rupert’s Land a territory politically distinct from the colony of Canada, but the manner of its acquisition by Canada underlined its distinctiveness. In 1868, a year after Confederation, the British Parliament passed the Rupert’s Land Act, specifying that the Hudson’s Bay Company would surrender its “lands, rights, privileges, liberties, franchises, powers and authorities” under certain terms and conditions to be negotiated by the Company, the Colonial Office and the Canadian government.

The negotiations were protracted and the specification of the terms and conditions took years of haggling among all the parties, some of which erupted into lawsuits. In the background there remained the unacknowledged claims of the inhabitants of the Red River Settlement (in what later became the Province of Manitoba), who were decidedly cool about the prospect of being incorporated into Canada. Neither they – whether of British, French, Métis, “country-born” or Indian stock – nor the other natives of Rupert’s Land were consulted about their new status.

Obscure but legally important: Canada is often said to have “purchased” Rupert’s Land from the Hudson’s Bay Company, but Canada did not actually pay for the land, only for the company’s capital improvements such as Lower Fort Garry in the Rural Municipality of St. Andrews (aka the Stone Fort, top), Fort Edmonton (middle), depicted here after construction of Alberta’s Legislative Assembly building, and the Hudson’s Bay Brigade Trail (bottom). (Sources of images: (top) Gordon Goldsborough, 2014-0038; (middle) Peel’s Prairie Provinces)

Rupert’s Land was not, therefore, on the market the way Alaska had been in the 1860s, when it was purchased from Czarist Russia by the United States for US$7.2 million (or 2 cents per acre), a transaction that took place in March 1867 through a signed treaty. True, many Hudson’s Bay Company stockholders similarly wished to sell Rupert’s Land to the highest bidder and hoped to begin the auction with an offer from China. Russia and the United States were also expected to join the bidding, along with Canada.

Some Canadian politicians spoke of the subsequent Canadian “purchase” of Rupert’s Land; some Canadian historians still do. But the transfer of Company lands to Canada was not a real estate deal. The Imperial Crown simply transferred its authority to the Crown in Right of Canada. Canada “indemnified” – i.e., bought off – the Hudson’s Bay Company not for the territory of Rupert’s Land but for the several capital improvements made during the previous 230 years. These included such structures as the Stone Fort at Red River and the timber fort at Edmonton, but also far-flung portage trails and the like.

Looked at from the perspective of Laurentian Canadian history, Rupert’s Land was a gift to the new Confederation from the Imperial Crown, the missing link between Canada and the colony of British Columbia that inspired the empire-builders of the Macdonald-Cartier coalition to extend the new eastern political entity to the Pacific Ocean, to build the Canadian Pacific Railway and to incorporate the province of B.C. within Canada. As for the Company lands to the east of Hudson Bay, very little commercial viability was expected. This was fur territory peopled by Indigenous trappers and barbaric traders as it had been for centuries. Canada later gave Ontario and Quebec additional territory carved from those former Company lands.

Canada expanded in a mode quite different from the United States. Unlike the generally well-planned and logical formation of new states from territories – a process meant to reflect an area’s maturation from thinly populated, intermittently governed and often lawless frontier to incipient civilization – there was nothing in Canada akin to the American Northwest Ordinance or to its successor laws. A key difference was that a newly formed U.S. state gained the same rights and privileges as other states, an important element of real federalism.

The second policy area where Canada’s expansion westward differed profoundly from America’s was the absence of consultation with the inhabitants of the newly acquired Canadian territories. In the U.S. this always entailed serious two-way discussions.

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Here one should note that there are two elements essential to any federation. The first is a constitutionally defined division of responsibility between the central government and the constituent sub-national jurisdictions – provinces in Canada, states in the U.S. In a well-run federation each order of government stays in its constitutionally defined lane. The second element is that representation in the federal government combines numerical equality or “representation by population” with equal constitutional standing and privileges for all component jurisdictions.

“Enter the Union on an equal basis with existing states”: In contrast to Canada, the U.S. Northwest Ordinance of 1787 provided a formal and transparent mechanism by which newly settled territories could graduate to statehood if they met certain conditions – gaining the same rights and privileges as the original 13 states.

This second element is why the Americans combined in Congress a House of Representatives based on the principle of one person, one vote, with a Senate where each state – whatever its population – would send two senators to Washington, D.C. Because Canada does not provide equal provincial representation in the Canadian Senate (and for a few additional reasons) it has been called by political scientists a “quasi-federal state”. This particular anomaly (or defect) lay behind the attempt starting in the 1970s to establish a Senate that would have an equal number of Senators from each province, who would be elected and whose resulting legitimacy would allow the Senate to become effective in defending the rights of the provinces – the “Triple-E” Senate.

The second policy area where Canada’s expansion westward differed profoundly from America’s was the absence of consultation with the inhabitants of the newly acquired Canadian territories. In the U.S. this always entailed serious two-way discussions; ambitious pioneers would sometimes move out to a territory with the intention of taking part in its development and participating in its graduation to statehood.

In Canada, it was precisely the neglect and lack of communication that eventually led future rebel leader Louis Riel and his compatriot John Bruce to argue that the Western inhabitants of the Hudson’s Bay Company lands had been “abandoned” by the Imperial Crown. The Red River Settlement existed after the 1870 transfer, as they described it, in something akin to a Hobbesian state of nature. Consequently, they declared, the inhabitants of all the former western Company lands “refuse to recognise the authority of Canada,” which was seeking to coerce these subjects of the British Empire by imposing “a despotic form of government” on them.

“Our lives our fortunes and our sacred honour”: Métis leaders Louis Riel (top left) and John Bruce (top right) saw the 1870 transfer of Rubert’s Land to Canada as an act of “abandonment” by the British Crown; to protect the interests of the Red River Settlement (bottom), they “refus[ed] to recognise the authority of Canada.” (Sources: (top left photo) Library and Archives Canada, C-018082; (top right photo) Manitoba Historical Society Archives; (bottom map) Manitoba’s Red River Settlement, by Douglas Sprague and Ronald Frye)

Much like the British subjects a century earlier who became signatories of the then-colonial Declaration of Independence in 1776, the Red River authors declared “to the world” and to Canada in particular that they had established a Provisional Government and, closely following the final paragraph of U.S. Founding Father and future President Thomas Jefferson’s text, “mutually pledge ourselves on oath our lives our fortunes and our sacred honour to each other.” (Original non-punctuation)

Although this statement might sound hopelessly grandiloquent to modern-day ears, their claims were not without a political basis. As my friend and U of C colleague Tom Flanagan pointed out in his 1978 essay “Political Theory of the Red River Resistance: The Declaration of December 8, 1869”, the Declaration of the People of Rupert’s Land and the North West certainly rested on highly questionable legal grounds. To begin with, as noted, the land transfer was an intra-Imperial action. It was not the act of a sovereign power called the Hudson’s Bay Company abandoning the inhabitants of “its” territory and turning them over to another and alien sovereign power, Canada. The Company was not at all sovereign, and Canada was not fully sovereign.

The legal issue was of secondary importance, however, to the political significance of the Red River inhabitants’ response to the actions of Canada, starting with the Declaration and including not one but two open rebellions, the second of which was a serious armed conflict in which Canada’s control hung in the balance. In that second one, in 1885, Laurentian Canada mobilized and commanded Imperial military assets to impose its law on the rebellious Northwest. To the inhabitants, these actions, even if by then they themselves opposed Riel, looked like a continuation of the style of rule from London they had previously endured by way of the Company. That is, rule of the Northwest by “imperial” Canada was of a piece with British Imperial rule prior to 1870.

Between the Red River resistance and the truckers’ Freedom Convoy, over 150 years apart, came Prime Minister Macdonald’s grossly misnamed ‘National Policy’, which subordinated the economic vitality of Prairie agriculture to Laurentian industrial commerce. The National Policy amounted to simple exploitation of the West.

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This was why James Mallory, a distinguished 20th century McGill University political scientist, in his 1954 book Social Credit and the Federal Power in Canada referred to the Prairie provinces as “provinces in the Roman sense”. Whatever did he mean? A Roman provincia was distinguished by two major attributes. First it was a locale where imperium, administrative rule, was exercised by Rome or an agent of Rome. Second, unlike the inhabitants of Italy, “provinces” paid tribute to the capital. Moreover, the etymology pro-vincere (Latin for something that was defeated or vanquished) suggests the provinciae were conquered territories. Aside from their military and geopolitical significance, Roman provinces were there to be taxed and to enrich their Roman rulers.

The analogies to 19th and 20th century Canada are clear. Ottawa – as pitiful a town as it was – acted as a new Rome on the Rideau. The territories (and soon-to-be second-class provinces) were acquired additions; they existed to strengthen and benefit Laurentian Canada by analogy with Roman Italy, and to enrich its leading citizens. And the provincials were expected to behave themselves. To this day, the embarrassment of 1885 has not been forgotten by Laurentian administrators. Of course, the Canadian punishment for rebellion was not Roman in its ferocity, although the result for Riel was equally final.

“Provinces in the Roman sense”: According to political scientist James Mallory, Canada’s Prairie provinces were akin to “provinciae” in ancient Rome – conquered lands whose inhabitants were not citizens and who existed to serve the interests of the Imperial Capital and the Italian heartland. Shown, the fall of Macedonia in 168 BC depicted in The Triumph of Aemilius Paulus by Carle Vernet, 1789. (Source of painting: The Metropolitan Museum of Art)

Northrop Frye once remarked that if history is a narrative of what happened, myth tells the story of what happens all the time. In that sense, myth is a major constituent of what we now call political culture. The Red River resistance, however comic and ineffectual it appeared to later Laurentian historians, became part of a Western myth, the most recent manifestation of which was the Freedom Convoy of 2022. And, incidentally, Laurentian historians were a self-described “school” centred at the University of Toronto. The most famous of them was the first modern biographer of Sir John A. Macdonald, Donald Creighton. His thesis, The Commercial Empire of the St. Lawrence, published by Yale University Press in 1937, effectively founded the Laurentian school. The second edition, published by the U of T Press, bore a franker title: The Empire of the St. Lawrence. That is the origin of the term “Laurentian Canada”.

Between the Red River resistance and the truckers’ convoy, over 150 years apart, came Prime Minister Macdonald’s grossly misnamed “National Policy”, which subordinated the economic vitality of Prairie agriculture to Laurentian industrial commerce. (To oversimplify somewhat, high import tariffs protected eastern industries while making imported goods critical to the Prairies’ economic development needlessly expensive, in turn making export-dependent Prairie farmers less economically competitive; the National Policy amounted to simple exploitation of the West.) When Alberta and Saskatchewan became Roman-style provinces in 1905, the Dominion Lands Policy saw to it that the major source of revenue from land sales and fees remained reserved “for the purposes of the Dominion”, not them.

The Western political response continued to reverberate for more than a century. Several political parties and social movements formed in opposition to Laurentian policies: the Progressives, Social Credit, the Social Gospel, the CCF, and later the Reform Party and the Canadian Alliance. The fact is, Westerners have typically wanted to make Canada work as a genuine federation. They were neither revolutionaries nor separatists. Like their cousins in the American West, they sought equal rights as citizens and equal representation for Western, especially Prairie, provinces.

In 1905 the Dominion of Canada carved the new provinces of Alberta and Saskatchewan out of portions of the Northwest Territories; the newcomers were treated as distinctly second-class in comparison to the original provinces, among other things only gaining full control over their lands and natural resources in 1930. (Sources of photos (clockwise, starting top-left): Calgary Herald Archives; Provincial Archives of Saskatchewan R-A4110-2; Glenbow Archives, na-1496-2; Western Development Museum)

And while all of these movements mounted often-spirited resistance to Laurentian political and economic controls, they also seemed to accept the political institutions of imperial Canada. Remember the slogan of the Reform Party in 1987? “The West wants in.” Why? To increase the likelihood of self-government, the very desire for which was dismissed by Laurentians as unintelligible: were these pesky Westerners not already citizens of an already self-governing country? They must be alienated, poor things, and in need of the ministrations of an alienist.

David A. Smith, another distinguished political scientist, who taught for many years at the University of Saskatchewan, provided a less condescending answer than the conventional dismissal by Laurentians in his 1969 essay “A Comparison of Prairie Political Movements in Saskatchewan and Alberta”. Westerners, Smith wrote, had tried working within the dominant political parties, then through so-called “third parties” that attempted to persuade the dominant parties, then through balance-of-power strategies. “No other area of the country,” Smith said, “has experimented with so many partisan alternatives and had so little apparent satisfaction from the results.”

A third distinguished political scientist, Alan Cairns, once asked: why were the Social Credit and the NDP called “third parties?” In B.C where Cairns taught, these parties were the government, the major players in a vibrant two-party system. The “third parties” were the Liberals and Conservatives. One might say the same thing about Social Credit and the Cooperative Commonwealth Federation (the future NDP) on the Prairies. That is, the political articulation of the Western provinces is distinct from that of Laurentian Canada.

The Prairie provinces continued to be subjected to destructive Laurentian policies throughout the 20th century, such as prolongation of the Canadian Wheat Board, official bilingualism and the National Energy Program, implemented by Pierre Trudeau in 1981 (shown on bottom left, to the right of Alberta premier Peter Lougheed in the centre). Depicted on bottom right, oil sands facility at Mildred Lake. (Sources of photos: (top left) Canadian Government Motion Picture Bureau/Library and Archives Canada/C-064834; (bottom left) The Canadian Press/Dave Buston; (bottom right) The Canadian Press)

After Canada’s first half-century or so, after the Prairie provinces finally in 1930 gained control over their natural resources (as Canada’s “founding” provinces had had from the start), there followed in the post-Second World War era further nonsensical Laurentian policies: the needless prolongation of the Canadian Wheat Board (whose command-and-control methods evoked the late Roman Emperor Diocletian’s ludicrous economic decrees), the definition of Canada as a bilingual country (the major consequence of which was to ensure that most Westerners did not find a professional career in Ottawa attractive), and of course the unforgettable National Energy Program, seen by many Albertans as the 20th century successor to the National Policy.

Then, the 1982 Constitution Act gave the Supreme Court of Canada effective control of legal aspects of the Constitution. And, like the first Supreme Court of Canada, it has acted largely as a centralizing creature of Laurentian Canada. One must be remarkably naïve not to think that Prime Minister Pierre Trudeau had something like this in mind when he began campaigning to “patriate” the Constitution nearly two generations ago. In any event, a major consequence of the 1982 Act was to undermine the institutions of federalism, particularly provincial responsibility for natural resources and the environment, which had been sustained by the jurisprudence of Britain’s Judicial Committee of the Privy Council in earlier times and largely respected after 1949 when judicial appeals to the Law Lords were abolished.

For Livingston, ‘Legal answers are of value only in the solution of legal problems.’ In contrast, he argued, ‘Federalism is a function not of constitutions but of societies.’ Consequently, federalism is concerned with economic, historical, social, political and cultural realities, which is a great deal more than law.

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Today almost all the malign aspects of Canada’s Constitution are encapsulated in the federal equalization program. As Rob Anderson, Derek From and I point out in the Free Alberta Strategy (there’s also good material in this C2C essay), the Government of Canada has for decades expropriated vast amounts of fungible wealth from the taxpayers of the Prairie West and especially from Albertans – amounting to literally hundreds of billions of dollars. Moreover, the latest assault by the Justin Trudeau government has combined this traditional wealth removal with a novel attack on the source of provincial prosperity, the oil and natural gas industry in general and the oil sands in particular. For many Albertans, Ottawa has definitively breached the principles of the federal Constitution.

Now what?

First, recall the historical importance of federalism. In those remote days prior to the Canadian Charter of Rights and Freedoms, the focus of Canadian constitutional politics was on the balances struck over the years between responsibilities under s. 92 of what was then known as the British North America (BNA) Act that belonged chiefly to the provinces – such as transportation, regulation of businesses and professions, creation and oversight of municipalities, education, courts of law, health care and natural resources – and those given to the Dominion government under s. 91 – such as national defence, foreign relations, the criminal law, relations with Indians and international trade.

Of all the theorists of federalism to whom I was introduced as an undergraduate, William S. Livingston has remained my favourite. His Federalism and Constitutional Change was published by Oxford in 1956. It was preceded by an article, “A Note on the Nature of Federalism”, that established his main arguments. In my opinion they have not been superseded though they may have been forgotten.

“It’s not like Ottawa is a national government”: The Alberta Sovereignty within a United Canada Act, passed in late 2022 by the UCP government of Premier Danielle Smith, pictured, aims to strengthen the province’s ability to limit unconstitutional intrusions of federal policy and law into areas of provincial jurisdiction, thereby reaffirming that Canada is a federal state. (Source of photo: The Canadian Press/Jason Franson)

This is the context within which Premier Smith’s remark is to be understood when she said on third reading of Bill 1, later the Sovereignty Act, “It’s not like Ottawa is a national government.” (Emphasis added)

Social and political realities change: formerly poor jurisdictions such as Alberta grow wealthy; formerly rich jurisdictions such as the Maritimes grow poor. Political institutions eventually display the characteristic of serving purposes for which they were not initially designed. Just as federal societies change, federal institutions are required to change as well in response to new realities. If federal institutions are incapable of responding to changes in federal societies, the result is political dissolution, which is to say, independence of a former constituent jurisdiction. That was the prospect posed by Quebec in the 1970s after its “Quiet Revolution”. Quebec separatism spooked Canada sufficiently to change the effective federal Constitution to reflect the new configuration of the federal society.

This is not to say that legal federalism, which defines the primary areas of jurisdiction of Ottawa and the provinces, is unimportant. Sections 91 and 92 of the BNA Act are still in force and effect. Moreover, reasserting and defending the constitutional validity of the division of powers is the primary purpose behind Alberta’s Sovereignty Act.

Although attacked by critics, Alberta’s Sovereignty Act has received strong popular support for challenging the Justin Trudeau government’s constant intrusions into areas of provincial constitutional jurisdiction; the author points out that the Constitution does not require provinces to enforce federal laws, and that the Supreme Court of Canada has confirmed this. Shown, supporters of the Sovereignty Act outside the Alberta legislature, December 2022. (Source of photo: CityNews/Laura Krause)

Its central provision regarding federalism enables the provincial government to refuse to enforce federal laws. The decision not to do so would be based on the judgment of the legislature that the federal law in question was illegal, unconstitutional, harmful to Albertans or contrary to Alberta’s interests, based primarily on the text of ss. 91 and 92 and how those provisions were put into practice over Canada’s first century – but which recent federal governments have successively and, in the Justin Trudeau government’s case, systematically undermined or overridden as if they weren’t even there.

What is novel about this provision is that it would require Canada to take Alberta to court and there to prove its case, not the other way around as is the current practice. Nowadays when Ottawa first intrudes upon or overrides provincial jurisdiction and puts its unconstitutional policy or law into practice, it forces one or more provinces to try to stop it – even as the damage is already being done and the new policy threatens to become institutionalized through force of habit.

Equally important, there is no provision in the Constitution requiring any province to administer or enforce federal law. (Please see also this article and this article for supporting evidence of that contention.) The reason is obvious: Canada remains in law and reality a federation, not a unitary regime where provinces are simply agents of Ottawa the way Alberta municipalities are creatures of the provincial government. One reason for the political support that the Sovereignty Act has received are the objections to the arrogant default assumption of the Trudeau government that it is (except for Quebec) a “national government” – precisely what Danielle Smith denied. That is why it was originally and for a long time thereafter referred to as the Dominion government and today is called the federal government, which implies a government with limited and clearly enumerated constitutional scope and powers.

The political distance dividing Alberta’s Sovereignty Act from Ottawa’s Clarity Act is huge. The one contemplates a restoration of federalism, the other an end to it. If Alberta is to remain strong and free – fortis et liber – Laurentians will have to change their attitude and their political culture.

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Another way of indicating the issue of connecting the reality of a federal society to a federal constitution is found in a remark of the late U.S. conservative journalist Andrew Breitbart, who famously observed that “politics is downstream from culture.” This is a snappy version of Frye’s remark regarding myth or what Livingston meant by the primacy of society. But what is downstream from politics? The answer is simple: the law of the Constitution.

Ask yourself: where did the BNA Act come from back in 1867? Or the 1982 Constitution Act? They came from political negotiations and political deal-making in response to political ideas and demands generated by the changing realities of a federal Canadian society. In that context, the 1982 Constitution Act looks like a legal response to the social changes of the “Quiet Revolution”. That is also where Alberta’s Sovereignty Act came from. Indeed, it can be seen as the current expression of a not-so-quiet Alberta revolution initiated by Ralph Klein, premier of Alberta from 1992 to 2006.

Those who say the Constitution is set in stone and can never be re-opened are legal fundamentalists and they are wrong. All constitutional documents, so revered by lawyers, especially the ermine-clad lawyers on the bench of the Supreme Court of Canada, were all downstream from political deals that reflected changing social, economic, cultural, etc. realities. Of course the Constitution can be re-opened! That is one of the long-range purposes of the Sovereignty Act.

“Clear majority on a clear question”: Two years after the 1998 Quebec Secession Reference case before the Supreme Court of Canada, the Liberal government of Jean Chrétien (on bottom, leaning forward) introduced the Clarity Act, establishing the conditions under which Canadian provinces may be allowed to begin the process of secession. The author considers this another act violating the concept of federalism, with Ottawa unilaterally calling the shots and placing provinces in a subordinate position. (Sources of photos: (top) @Law Scribes/X; (bottom) CP Photo/Fred Chartrand)

If Laurentian Canadians and lawyers nearly everywhere say that the Sovereignty Act is unconstitutional, I agree but with the following qualification: legal unconstitutionality is simply another way of saying it’s time to change the law of the Constitution. That is what Bruce and Riel had in mind so many years ago. The law of the Constitution may work well even today for Laurentians and for Ottawa bureaucrats, but they have become what English historian and philosopher Arnold Toynbee called a “dominant” rather than a “creative” minority. More to the point, if the law of the Constitution does not work for Albertans and for others in the Prairie West, why should it be respected? All the strategies listed by David Smith have not made a dent in the adamantine attitudes of Laurentian Canada. In their collective imperial mind, in their political culture, the Prairie West remains a colony. The Sovereignty Act aims to bring an end to a very unpleasant history.

And then there is the Clarity Act to consider. In the 1998 Quebec Secession Reference case brought by the Government of Canada, the Supreme Court of Canada required that any provincial referendum on secession receive a clear majority on a clear question in order to be valid and so to trigger mandatory negotiations. The Court did not define what either a clear majority or a clear question might be.

Two years later the Jean Chrétien government (under great pressure from the Reform Party) introduced what became the Clarity Act, according to which the Parliament of Canada would determine before any provincial referendum on potential secession whether the question was clear enough and, after the vote, whether the degree of support was sufficient to require negotiation on the terms of secession. If a referendum met those two criteria (according to Parliament), then a constitutional amendment requiring the consent of Parliament and the provinces would also have to be passed.

A few years later, former Parti Quebecois leader and Premier Jacques Parizeau told CTV News that the Clarity Act “meant nothing.” One reason for his remark was not just that Parliament had stacked the deck but that Quebec had passed its own law, one which emphasized the right of Quebec citizens to self-determination. Now, if push came to shove, one might expect Alberta to do the same.

The political distance dividing Alberta’s Sovereignty Act from Ottawa’s Clarity Act is huge. The one contemplates a restoration of federalism, the other an end to it. If Alberta is to remain strong and free, fortis et liber, as indicated on its coat of arms, Laurentians will have to change their attitude and their political culture. That is the challenge of political federalism today. Acknowledging that reality is the condition for making Canada a genuine federation in law. If not, it will take the more desperate remedy outlined in the Clarity Act to induce some sobriety into Laurentian consciousness.

Barry Cooper is a professor of political science at the University of Calgary. His latest books are Paleolithic Politics (2020) and, with Marco Navarro-Génie, COVID-19: The Story of a Pandemic Moral Panic (2020).

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Alberta’s fiscal update projects budget surplus, but fiscal fortunes could quickly turn

Published on November 21, 2024

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From the Fraser Institute

By Tegan Hill

According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.

The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.

For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).

And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.

In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.

This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.

Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.

Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.

Of course, if the government falls back into deficit there are implications for everyday Albertans.

When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.

According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.

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Tegan Hill
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Alberta

Premier Smith says Auto Insurance reforms may still result in a publicly owned system

Published on November 21, 2024

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Better, faster, more affordable auto insurance

Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.

After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.

Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.

“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”

Danielle Smith, Premier

“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”

Nate Horner, President of Treasury Board and Minister of Finance

Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.

Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.

Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.

In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.

Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.

By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.

“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”

Nathan Neudorf, Minister of Affordability and Utilities

Quick facts

  • Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
  • A 2023 report by MNP shows
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