Ontario Premier Doug Ford says the federal government should consider blocking oil exports to the United States to give Canada leverage in the trade war that’s now hitting that province hard.
asserted
that → say → province
“Although I understand the need to respond strongly to these tariffs, I cannot think of a more disastrous policy decision than cutting off or taxing Alberta’s oil to the United States,” she said.
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she → understand → States
This means the metaphorical taps are now in Prime Minister Mark Carney’s hands.
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taps → mean → hands
But can Carney really cut off or put an export tax on Alberta oil without violating the constitutional division of powers?
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Carney → cut → powers
The answer is probably yes, but don’t expect Alberta to go down without a fight.
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Alberta → expect → fight
The Constitution Act of 1867 assigns all matters that governments may regulate exclusively to either the provinces or the feds, and provides a residual power to Parliament to “make laws for the peace, order, and good government of Canada, in relation to all matters not coming within the classes of subjects by this act assigned exclusively to the legislatures of the provinces.”
It’s not always easy to assign a matter exclusively to one level of government.
uncertain
It → assign → government
The court has developed certain rules to deal with this reality, but it’s not always clear how they will be applied.
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they → develop → reality
For example, if two laws are in conflict and it’s impossible to comply with both laws, the federal law may prevail under the doctrine of paramountcy.
uncertain
law → ’ → paramountcy
That said, if a law intrudes on the “core” or the “basic, minimum and unassailable content” of the other order of government’s powers, it may be deemed inapplicable under the doctrine of interjurisdictional immunity.
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it → say → immunity
One thing that’s clear under the Constitution is who owns the oil (and forests … and potash).
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who → ’ → oil
Canada transferred ownership of natural resources to the Prairie provinces through the Natural Resources Transfer Agreements and related acts, which became part of the Constitution in 1930.
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which → transfer → 1930
It’s also clear that Alberta has exclusive control over the “development, conservation and management of non-renewable natural resources and forestry resources in the province.”
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Alberta → ’ → province
That’s from the text of Section 92A, which was added to the Constitution Act of 1982 at Alberta’s insistence.
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which → ’ → insistence
If the provinces own their natural resources and have control over their development, how can Ottawa impose embargoes or taxes that would stifle their sale or development?
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that → own → sale
It turns out, Ottawa would have a number of strong arguments.
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Ottawa → turn → arguments
First, it could point to the 1982 Supreme Court decision in the Exported Natural Gas Tax Reference, where the court examined a federal tax proposed by the Pierre Trudeau government on natural gas, including on exported natural gas, which Alberta opposed.
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Alberta → point → which
Alberta argued that Section 125 of the Constitution Act of 1867, which says, “No lands or property belonging to Canada or any province shall be liable to taxation,” blocked the proposed tax.
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lands → argue → tax
The Supreme Court ruled that the proposed tax was a valid exercise of the federal taxation power outlined under Section 91(3) of the act.
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tax → rule → act
The court also reasoned that this was not an export tax because it applied also to Canadian consumers, but had it been an export tax, the federal government may have been able to impose that anyway under its “trade and commerce” power, as it had long done with customs duties.
So what about a total embargo?
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it → reason → embargo
Here Alberta’s argument would be stronger, but one would expect the federal government to push back by arguing the embargo is within its jurisdiction under peace, order and good government, either because it’s an emergency or a national concern.
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it → expect → peace
In 1976, a majority of the Supreme Court held in the Anti-Inflation Act Reference that the Pierre Trudeau government’s price controls aimed at runaway inflation were a valid exercise of that power.
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controls → hold → power
More recently, in 2021, the Supreme Court upheld the federal carbon tax as a national concern in the Greenhouse Gas Pollution Pricing Act References.
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Court → uphold → References
Of course, legal arguments aside, it seems obvious the Carney government would be playing with fire by blocking oil exports.
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government → seem → exports
While such a move might play well in Ontario and Quebec, Albertans are angry enough about the lost years of oil sands production that have already occurred.
uncertain
that → play → production
Any move Carney makes now could antagonize Alberta right before it votes on whether to hold a separation referendum.
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it → make → referendum
National Post
Josh Dehaas is Interim Litigation Director with the Canadian Constitution Foundation, a charity that fights for Canadians’ rights and freedoms.
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that → fight → rights
The Aporia
