Alberta Energy Exports Protected from Federal Taxation

Albertans are being assured that their energy exports will not be subject to federal taxes in response to the ongoing trade war with the U.S. The statement comes after a recent opinion column suggested Prime Minister Mark Carney was considering using an export tax on oil and gas as a form of retaliation against U.S. President Donald Trump's tariffs.

According to experts, such a move would be technically correct but legally and historically wrong. Under Section 91 of the Canadian Constitution, the federal government has the power to regulate trade and commerce and levy taxes. However, Section 109 states that all land, mines, minerals, and royalties belong to the provinces.

Section 125 further stipulates that no lands or property belonging to Canada or any province shall be liable to taxation. Canadian courts have ruled that this section trumps federal powers.

This is not a new issue. In 1981, the Alberta Court of Appeal ruled unanimously that a federal export tax on oil and gas was an illegal tax on Government of Alberta property. The Supreme Court later upheld this decision, stating that Section 125 raised to the rank of constitutional guarantee the immunity of provincial property from taxation.