Alberta Export Tax Blocked by Constitution and Trade Rules

A proposed federal tax on Alberta oil and gas exports to retaliate against the US faces significant constitutional and trade barriers, according to the Frontier Centre for Public Policy. The tax would not only harm Alberta producers but also risk reviving separatist anger in the province ahead of its October referendum vote.

In 1980, the Trudeau government imposed the National Energy Program, forcing much of Alberta's oil to be sold below world prices. This move ended badly for Ottawa, with Olds-Didsbury electing a Western Canada Concept MP in 1982, who went on to spark separatist sentiment.

Today, Ontario Premier Doug Ford and former Alberta premier Jason Kenney have both argued for using Alberta's energy resources as leverage against the US. Climate activist Seth Klein proposed a 15% tax that he estimates would raise 'close to $25 billion' a year.

However, proponents of an export tax face three major obstacles: Section 125 of the Constitution, which prohibits Ottawa from taxing property belonging to a province; section 92A, which gives Alberta exclusive say over oil production levels; and CUSMA article 2.15, which bans export taxes unless the same tax applies at home.