Alberta Export Tax Proposals Risk Constitutional Barriers and Separatism

Proposals to tax Alberta's oil and gas exports as a form of retaliation against the US are being met with caution. The idea, floated by climate activist Seth Klein, would see a 15% tax imposed on energy exports, raising 'close to $25 billion' per year. However, experts argue that such a move would be unconstitutional and potentially damage Canada's relationship with the US.

The Supreme Court struck down a similar tax in 1980, ruling that Alberta-owned gas was exempt from taxation under Section 125 of the Constitution. Furthermore, CUSMA article 2.15 prohibits export taxes unless the same tax applies at home.

Alberta Premier Danielle Smith and Prime Minister Mark Carney have both expressed skepticism about the idea, with Smith calling it 'not a viable option.' Energy analyst Heather Exner-Pirot notes that an export tax would primarily harm Alberta producers, who would be responsible for paying the tax. This could lead to lower oil prices and reduced royalties for the province.

The proposal has also reignited concerns about separatism in Alberta, with support for a binding separation vote at 18% according to recent polls.