Jason Kenney warns of Alberta separation over Trudeau's environmental legislation

Just two days after being sworn in as premier of Alberta, Jason Kenney spoke candidly about separation from Canada as he decried federal environmental legislation as a "full frontal attack" on Alberta's economic prosperity and a "blatant violation of the Constitution."

Speaking before the Senate’s standing committee on energy, the environment and natural resources, he said if the legislation is passed in its current form, it will be “a disaster for the economy and will seriously rupture national unity.”

Kenney, a former federal cabinet minister in the Stephen Harper government, insisted that he was a “proud Canadian” and not advocating Alberta separatism, but federal ministers suggested his claims were false and irresponsible, provoking polarization.

Kenney’s visit came two days after an energy company walked away from more than 4,000 wells, leaving over $300 million in clean up liabilities.

The collapse of the company, Trident Exploration, is part of a larger financial problem facing Alberta as struggling companies run out of cash to cover the cost of cleaning up sites when projects shut down. The companies are responsible for paying these costs, but the regulator has said, in internal documents obtained by National Observer as part of a joint investigation with the Toronto Star and Global News, that it needs tougher rules to enforce this responsibility.

In the absence of tougher rules, a senior official at the regulator has warned that taxpayers could wind up covering the cost of these liabilities, estimated to be as high as $260 billion.

It's about better rules, says McKenna

Federal Environment and Climate Change Minister Catherine McKenna has said that her own legislation, Bill C-69, is also about introducing better rules.

Her proposed bill would overhaul the federal environmental assessment process by broadening investigations into proposed projects to include assessment of environmental and economic impacts, as well as consulting Indigenous groups more.

The bill also proposes replacing the Canadian Environmental Assessment Agency with a new watchdog — the Impact Assessment Agency of Canada, and replacing the Calgary-based National Energy Board with a new Canadian Energy Regulator that would be governed by a cross-country board of directors. If passed, the new legislation would give the federal environment minister the power to veto a proposed project before an assessment starts, or once the review process has ended.

Kenney, who also met with Prime Minister Justin Trudeau in the afternoon, took particular exception with that facet of the legislation, insisting it politicizes environmental reviews, and said he will immediately launch a constitutional challenge over Ottawa’s “obvious and flagrant violation of jurisdiction” to regulate natural resources, which are provincial jurisdiction under section 92(a) of the Constitution.

It was the former Harper government that inserted provisions into environmental laws that gave federal cabinet ministers veto power over independent reviews of new projects. Kenney was a minister in cabinet when that legislation was adopted in 2012. The Harper government’s legislation also dramatically reduced federal oversight of industrial projects, cancelling thousands of environmental reviews overnight after it was adopted.

The Liberals campaigned in 2015 on promises to reverse some of those changes and improve environmental laws to help rebuild public trust in government oversight of industry, in order to help build public support for major projects needed to support economic growth.

By law, the federal government has the power to adopt laws related to some environmental issues, including the regulation of toxic substances, the protection of species at risk, as well as fisheries and oceans.

The government released proposed draft regulations Wednesday that would put "in situ” oil sands projects on the list of those requiring federal environmental assessments. They would only be exempt if Alberta keeps a hard cap on emissions from the oil sands in place.

"These are exclusively within Alberta territory and they relate to the production of natural resources," Kenney told the room, packed with senators, lobbyists, political staffers and journalists. "There is no rational person who can see, under section 92(a), a federal interest to regulate that. It would be a blatant violation of the Constitution.”

Alberta Energy Minister Sonya Savage said the project list “really muddies the waters.”

“You can’t exempt something you don’t have the right to regulate in the first place. That’s preposterous.”

It was not entirely clear what she was referring to, given the existing federal environmental powers, including the power to regulate toxic substances such as carbon dioxide and other greenhouse gases.

Greenhouse gas emissions trap heat in the atmosphere and contribute to climate change. Scientists say this is causing rising temperatures, melting glaciers, ocean acidification and extreme weather such as flooding. Governments around the world have committed to addressing this challenge to avoid significant ecological and economic impacts.

But many people across Canada are also concerned about recent economic woes that have affected the oilpatch and other industries.

Amid the downturn in the oil sector and the many jobs that have been lost, there’s been growing resentment in Alberta over the inability to get its energy resources to global markets, and a sense of increasing alienation. In February, an Angus Reid poll found as many as 50 per cent of Albertans support the concept of separating from Canada.

Kenney raised the stakes, telling senators: “The federal government is asking you to violate the Constitution of Canada in adopting this bill and that's why, should it proceed in its current form, we'll see the federal government in court.”

“I’m here to convey to you and your fellow senators there is a growing discord of national unity in Alberta which would be exacerbated by the adoption of this bill,” Kenney said, later stressing he’s a federalist.

Federal Natural Resources Minister Amarjeet Sohi, who represents an Edmonton riding in Parliament, said that the federal government understands that the economic downturn has caused a lot of anxiety among Albertans as people lose jobs.

"I talk to Albertans on a regular basis," he said. "I have lived in Alberta for 34 years and I still live in that province and I talk to people on a regular basis, listening to their anxieties. But they expect us to work together because they understand Canada works better when we work together. I rarely hear my constituents talking about separation or leaving Canada. I think it's irresponsible for anyone to suggest that Alberta will leave the Confederation. Yes we have challenges and we're working hard to fix those challenges."

Kenney acknowledged some of that support for separatism is rooted in frustration and doesn’t necessarily mean that people want to part ways with the rest of the country, but stressed the general mood is real.

'If you like OPEC dictatorships, you've got to love policies like this'

He noted this bill is known as the “no more pipelines act” in his province and seen as another tool that’s being used to landlock Canadian energy.

In recent years, he said tens of billions in capital has fled the province, and for the most part moved south of the border to the American oil and gas industry, taking jobs and equipment with it. Kenney said the uncertainty created within the policy environment by the bill is a large factor.

Kenney also spoke out against a cap on oilsands pollution introduced by his predecessor, former NDP premier Rachel Notley.

“If you like OPEC dictatorships, you’ve got to love policies like this,” he told reporters later.

“All (the cap on oilsands emissions) does is create carbon leakage. It moves carbon-producing energy activity from Canada to the United States, Russia, Saudi Arabia and Iran.”

He continued by suggesting that this was an “OPEC enrichment strategy” originating from a conspiracy among foreign-funded environmentalists to punish Alberta and let other oil-producing jurisdictions thrive. This prompted some smiles from his energy minister and at least one reporter.

“They should get an award for OPEC for doing great service and allowing the OPEC dictatorships — this is funny? — to dominate global energy markets,” Kenney said, gesturing at the reporter.

'Full frontal attack on our economic prosperity'

In February, former premier Rachel Notley asked the committee why the government would stand in the way of getting a good many energy projects off the ground. Kenney said he endorses the comments made by his “distinguished predecessor” and the amendments she put forward, as well as those proposed by the energy industry.

“This bill does not need a nip and tuck. It needs complete reconstructive surgery. Or it needs to be put out of its misery.”

Given the growing anxiety around international investment in the sector, Kenney said he too has a hard time grasping the rationale behind the proposed legislation, which he insists only increases uncertainty within the sector.

He asked senators to think of a moment in history where there was 50 per cent support among Quebecers for leaving Canada.

“Can you imagine a circumstance of the federal government bringing forward a bill which would have the clear effect of undermining Quebec’s largest industry?”

He said that would be unthinkable — no government would proceed with such a measure.

“This is not just a slight to the people of Alberta. This is the culmination of a full frontal attack on our economic prosperity,” Kenney said.

“I plead with you as federalists to understand the national unity implications of this bill.”

'Inflammatory language'

McKenna, the federal environment minister, disputed his claims that the Impact Assessment Act encroaches on provincial jurisdiction.

“I think it is unfortunate to use inflammatory language to foster polarization,” she said outside the committee room.

“And let’s be clear: the environment is squarely an area of joint jurisdiction. The Supreme Court has been clear about that.”

She told senators the suggestion that this bill would prevent good projects from moving forward “couldn’t be further from the truth.”

“The current system is a broken system that has let good projects languish in uncertainty,” she said, referring to the changes adopted when Kenney was a federal minister.

The previous Harper government introduced its changes to environmental laws as part of an omnibus bill, more than 400 pages long, that was attached to its 2012 budget and followed recommendations from pipeline and oilpatch lobbyists. The government adopted this legislation without extensive public consultations.

McKenna said the Liberal government has been consulting with people on this overhaul since January 2016, and contrary to the rhetoric that’s bandied about, there’s no great divide in terms of what people want. Stakeholders, including industry, are calling for increased certainty around the process, which will in turn give confidence to investors. By relying on science, she said the new rules and evidence-based decision making in the bill will increase trust, protect the environment and help foster a genuine partnership with Indigenous peoples to advance reconciliation.

“No more short-term gains causing long-term pain for communities.”

Pointing to the estimated $500 billion worth of resource projects planned for the next 10 years in this country, she said “we’ve got to get our act together.”

“That’s the intent of Bill C-69. Better rules are better for everyone. It’s better for the environment. It’s better for the economy.”

A key part of the bill’s ‘one project, one review approach’ is an early planning component. That will see stakeholder engagement across the board and provide an opportunity to flag issues out of the gate McKenna said, and make clear to project proponents what’s expected of them.

Sohi, the federal natural resources minister said such an approach would have gone a long way to avoiding issues the Trans Mountain pipeline expansion is facing. It was first submitted to the National Energy Board in 2013 and still hasn’t been built. He said it’s been left stranded because of a failure to consult with Indigenous people.

“Early engagement for me as an Albertan and minister is so important,” he said.

“We’ve not been able to build a single pipeline to tidewater in the last few decades. It’s really holding us back. But in order to build a pipeline, we can’t just ram it through. We must have a process that works. We have to fix the process or we’ll be in the same position as the last few decades.”

McKenna said Indigenous people want to be part of the process and have their rights respected as part of that. It goes beyond the duty to consult that’s been mandated by the courts.

“The idea that they’re all against resource development is just not true,” she said. “Unfortunately under the current legislation, we end up with polarization, we end up in court and good projects are not able to go ahead. This is the opportunity we have to get this right.”

As for the ministerial discretion in the bill that’s been criticized, McKenna said during consultations, the majority of people felt “final decisions should continue to rest with elected, accountable ministers.”

Kenney later described his afternoon meeting with Trudeau as a "frank discussion" about the need to build pipelines, in which he told the prime minister that Alberta would challenge the federal government's legislation in court.

Trudeau thanked Kenney for the meeting and said that Albertans and all Canadians are counting on them to work together to create jobs, grow the economy and take action on climate change while getting resources to market in a responsible way.

Editor's note: This article was updated at 9:51 p.m. MT on May 2, 2019 with additional comments from Jason Kenney and Justin Trudeau, following their meeting.