Carney Faces Constitutional Conundrum Over Alberta Oil Export Tax
A recent opinion column in the Herald sparked controversy by suggesting that Prime Minister Mark Carney is being urged to impose an export tax on Alberta oil and gas as a retaliatory measure against US President Donald Trump's tariffs.
The proposal, led by Ontario Premier Doug Ford, would involve using federal powers under Section 91 of the Canadian Constitution to regulate trade and commerce and levy taxes. However, this move would be legally and historically incorrect, as it would infringe upon Alberta's constitutional rights under Sections 109 and 125.
A 1981 court ruling by the Alberta Court of Appeal stated that a federal export tax on oil and gas was an illegal tax on Government of Alberta property. This decision was later upheld by the Supreme Court, which ruled that Section 125 raised to the rank of constitutional guarantee the immunity of provincial property from taxation.
The Supreme Court's ruling in 1981 marked a significant victory for Alberta, and then-premier Peter Lougheed used this momentum to negotiate the September 1981 Energy Agreement, which did not include a federal export tax. Additionally, the agreement led to the addition of Section 92A to the Constitution, affirming provincial power over natural resource development.