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Jason Kenney said the history of Alberta has been to 'defend and expand our constitutional jurisdiction for reasons of economic survival.'

CODIE MCLACHLAN/The Globe and Mail

Jason Kenney says Alberta will not cede “an inch” of jurisdiction to the federal government in the fight against climate change, setting the stage for a pitched battle that could have generational consequences for the country.

It’s a clash that could claim the country’s climate strategy, creating uncharted challenges for Prime Minister Justin Trudeau as he struggles to balance the fight against global warming with the pocket-book realities of a resource-based economy.

In an interview with The Globe and Mail, the Alberta Premier said an offer to regulate a cap on heavy emitters in the province is still on the table despite it being tied to federal approval of the Frontier oil sands project, which was shelved by Teck Resources this week. However, Mr. Kenney is linking any new cap-regulation deal to a long list of demands.

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The Alberta government is still reeling from the Teck decision, which was another blow to a province facing ever-stronger economic headwinds as a consequence of continuing low oil prices and a widespread investor backlash against fossil fuels that is forcing rapid change in global markets.

That investor response was cited in a letter by Teck Resources president Don Lindsay to the federal government outlining his company’s decision to step back from the project. In it, Mr. Lindsay said today’s investors and customers are looking to do business in jurisdictions that “have a framework in place that reconciles resource development and climate change.” He said that doesn’t exist in Canada.

On Monday, the Alberta Court of Appeal ruled 4-1 against the federal government on the question of its authority to impose a carbon tax on provinces that didn’t have one or an equivalent. (The judge writing for the majority called it a “constitutional Trojan horse.”) Courts in Ontario and Saskatchewan ruled earlier in favour of Ottawa on the question.

The Supreme Court of Canada is expected to rule on the constitutionality of the federal carbon tax later this year, after a hearing set for next month.

A ruling at the Supreme Court affirming the Alberta decision would instantly jeopardize the federal government’s overarching climate policy, leaving the future of the country’s emissions-fighting strategy in disarray. Mr. Kenney, however, does not believe the fallout from such a decision would contradict what Mr. Lindsay called for in his letter – a cohesive plan that reasonably squares energy development with the undeniable consequences of climate change.

“Look, we’ve said we don’t believe a carbon tax is good policy,” Mr. Kenney said in his legislative office. “It simply punishes people for simply living normal lives, and that’s wrong. We’ve said all along that the provinces are in the best position to know how to deal with the problem of climate change, not the federal government. And we continually believe that to be the case.”

In his letter, Mr. Lindsay extolled the virtues of the federal carbon tax.

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NDP Opposition leader Rachel Notley said this week the framework Mr. Lindsay was referring to is precisely the type of regime her government put in place after it won election in 2015. That included a suite of measures, including a carbon tax, aimed at addressing the province’s emissions challenges. Most of those initiatives were ripped up by Mr. Kenney after he took office in 2019 – moves Ms. Notley now blames for the Teck decision.

Mr. Kenney said the history of Alberta has been to “defend and expand our constitutional jurisdiction for reasons of economic survival.” And in fighting the carbon tax he is doing no less, he said. “We are not going to sit back and allow Ottawa to decide the future of Alberta’s economy,” the Premier said.

Even if the country’s top court rules in Ottawa’s favour on the carbon tax, Mr. Kenney said he will continue to resist climate measures that he says are unfair and not in the economic interests of his province.

This was a theme that also found its way into the government’s Speech from the Throne read in the Alberta legislature on Tuesday. It said restoring investor confidence in the province was going to be a priority of the government in the coming years. To that end, the government confirmed the creation of a new investment promotion agency that will “expand Alberta’s profile in key capital markets around the world.”

The government will table a new budget on Thursday, one likely to confirm recent indicators that the province is in the midst of another bout of economic stagnation. The futures market shows the price of oil remaining well below levels on which the government had predicated recent budget numbers. In other words, its budgetary forecasts have already likely been blown well off course.

The future of the energy industry remains Mr. Kenney’s top priority, however. He said that the province remains willing to regulate a 100-megatonne cap on industrial emissions in the province – something it offered to do if the Frontier oil sands project were approved – “but we’re not going to be doing it [now] without some reciprocity. We need to see a path forward on our energy industry.”

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He said that meant, among other things, removing some of the more onerous environmental aspects of Bill C-69 (dubbed by Mr. Kenney as the “no more pipelines bill”). It would also include completing the Trans Mountain expansion and approving three or four major oil sands projects currently frozen because of a lack of pipeline capacity, he said.

“It means a commitment that no one will stand in the way of that,” Mr. Kenney said.

As for Canada’s commitments under the Paris climate agreement signed in 2016, Mr. Kenney said they were “goals we should try and live up to but we shouldn’t massively impoverish ourselves in the process.”

We have a weekly Western Canada newsletter written by our B.C. and Alberta bureau chiefs, providing a comprehensive package of the news you need to know about the region and its place in the issues facing Canada. Sign up today.

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