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Former Bank of Canada Governor David Dodge told reporters he is inserting himself into Alberta politics because he wants the 'climate for investment in this country is as good as it can possibly be.'Sean Kilpatrick/The Canadian Press

David Dodge, the former governor of the Bank of Canada who previously served as a deputy minister in the federal finance department, joined Alberta’s Opposition New Democrats on Wednesday to warn that the province’s proposed sovereignty act would create uncertainty and unnerve investors.

Mr. Dodge joined Alberta NDP Leader Rachel Notley at a news conference, where he argued that the United Conservative Party government’s proposed Alberta Sovereignty Within a United Canada Act would undermine confidence in the rule of law in Alberta. That confidence, he said, is necessary for Alberta to attract investment.

The NDP has framed much of its attack on Premier Danielle Smith’s first bill in economic terms, arguing that the idea that the provincial government can disregard federal policies will scare off billions in potential investment. Ms. Notley, who must burnish her economic credentials to sway voters in the spring election, has repeatedly challenged Ms. Smith’s flagship legislation by pointing to concerns from business leaders.

The bill would allow the government to direct government agencies, municipalities, school boards, police and other entities to refuse to enforce federal laws if the legislature determines they interfere with provincial jurisdiction. The government has proposed to remove provisions that would have given cabinet the authority to change laws in response to a motion in the assembly, without going through the full legislative process.

Mr. Dodge told reporters he is inserting himself into Alberta politics because he wants to ensure, as an outside observer, that the “climate for investment in this country is as good as it can possibly be.”

Mr. Dodge said he read the summary of the bill and has not reviewed the proposed amendments. He said he wasn’t commenting on the precise wording of the legislation, but the perception it creates. A wide swath of constitutional experts have criticized the bill.

“The tabling itself creates the strong impression investors will not be able to rely on due process and the application of federal-provincial law in the future,” Mr. Dodge said. “Investors would then look elsewhere.”

Ms. Smith, in the legislature Wednesday, brushed off Mr. Dodge’s analysis of the sovereignty act by arguing he is a “Liberal appointee to the Bank of Canada who is not even from Alberta.” The institution operates with considerable independence from the federal government and the governor is appointed by the board, with the approval of cabinet. Mr. Dodge is originally from Toronto and served under both Liberal and Conservative governments.

His seven-year term as the central bank’s governor occurred under three former prime ministers: Jean Chrétien, Paul Martin and Stephen Harper. He also served as the deputy minister of finance under former prime ministers Brian Mulroney, Kim Campbell and Mr. Chrétien.

Indigenous leaders on Wednesday escalated their fight against sovereignty legislation in Alberta and Saskatchewan, which tabled a similar bill last month. A number of chiefs put forward an emergency resolution denouncing the bills at the Assembly of First Nations special meeting in Ottawa. Chief Tony Alexis, on behalf of Treaty 6, said he is concerned that if Alberta, like Saskatchewan, presses ahead with its legislation, others may craft similar policies.

Ms. Smith, during her campaign to replace Jason Kenney as the UCP’s leader, promised to defend Alberta against perceived overreach from Ottawa by introducing a sovereignty act. The government stumbled as it rolled out the bill, at first accusing those who noted it granted cabinet sweeping powers to rewrite provincial laws of fear mongering. Days later, Ms. Smith said the bill needed revisions. On Monday, the UCP caucus said its members voted to narrow the instances under which the bill could be invoked and revoked cabinet’s law-making provisions.

Ms. Notley accused the UCP of trying to anger and divide Albertans and argued the sovereignty act is short on evidence it would “actually improve the economic conditions or economic rights of players within” the province. The act, she said, is designed “for the politics of Albertans” rather than for their economic benefit.

With a report from The Canadian Press

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