Breakenridge: States should develop their own energy policies

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Ostensibly, Ottawa planned 2% Tax on company stock buybacks Alberta appears to be vindicating those who argue that its resource sector needs to be protected from harmful federal policies.

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But the reality is that we need to find smarter strategies.

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The planned tax is not unique to oil and gas companies, nor is it a contingent tax on energy profits that some have been asking for. But for many observers, energy companies feel highly targeted.

Just days before the taxes were announced in the Federal Finance Update, Federal Environment Minister on Twitter He complains about the profits oil and gas companies were making and laments what he sees as a lack of investment in clean energy.

Ottawa appears confident the tax will encourage companies to invest in workers and production capacity. serious concern this further discourage investment in the energy field.

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Coincidentally, we also saw an introduction last week Saskatchewan Act I, a law aimed at asserting the state’s independence and further consolidating its control over its resource sector.Given the enthusiastic response From the Prime Minister of Alberta, it is reasonable to assume that this is a future preview of the Alberta Sovereignty Act.

Yes, states have jurisdiction over natural resources. Article 92(a) Constitutional LawPassing a law that already declares to be true seems redundant at best. Nor can we overlook or escape the fact that the federal government has fairly clear jurisdiction over environmental policy, including approval of interstate energy infrastructure.

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The fact that oil and gas companies are profitable at the moment, or that overall production is at or near record highs, has had, or may do so in the future, adverse effects on the sector. This is not an exemption from policy.

But ultimately, these are policy debates. Federal taxes on stock buybacks and their potential impact on the oil and gas sector underscore the futility of constitutionally threatening or loudly “reasserting” existing and established constitutional jurisdictions. is showing.

Clearly, there is nothing unconstitutional about Ottawa’s stock repurchase tax. Alberta and Saskatchewan cannot opt ​​out of this tax or otherwise prevent the two states from taxing businesses. The underlying appeal of policies such as the Saskatchewan First Act and the Alberta Sovereignty Act is that they somehow create constitutional bulwarks against intrusive or harmful federal policies. But really, it’s just smoke and mirrors.

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A stock buyback tax may help the Prime Ministers of Alberta and Saskatchewan garner more political support for the creation and implementation of such legislation, but what does this actually accomplish? It is fair to ask if

There is no magic constitutional wand that can be swung to thwart or dispute federal policy. In some cases, there is a place to challenge the courts, but in most cases, the state will lobby and push back against federal policies that it deems contrary to state interests. There is also the option of working with federal parties that support better policies. — seeking to work with the Liberal government in hopes of winning policy concessions.

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Otherwise, states can also implement their own policies. If concerns exist that federal policies may discourage investment in the energy sector, what can Alberta or Saskatchewan do to counteract them? Potential for innovative and meaningful state policy Exploring sex seems far more productive than trying to dig a fruitless constitutional moat around the state.

Last week raised alarm bells about both the risk of bad federal policy and the risk of ineffective state responses.

Afternoons with Rob Blakenridge airs weekdays from 12:30pm to 3:00pm at 770CHQR and from 2:00pm to 3:00pm at 630CHED. rob.breakenridge@corusent.com Twitter: @RobBreakenridge