Why Danielle Smith opposes a federal emissions cap while Alberta has its own on the books

In her victory speech after the United Conservative Party won the May 2023 provincial election, Alberta Premier Danielle Smith took aim at a looming federal cap on oil and gas emissions, among other policy proposals aimed at moving Canada toward its international climate commitments.

"As premier, I cannot under any circumstances allow these contemplated federal policies to be inflicted upon Albertans," she said.

"I simply can't and I won't."

The comments were a shot across the bow: a signal to the federal government that it can expect continued resistance from Alberta when it comes to policies like these, seen by supporters as steps that are necessary — if not overdue — toward reducing greenhouse gas emissions but viewed by opponents as intrusions into provincial jurisdiction.

But a cap on oil-and-gas emissions would not, technically speaking, be a new policy in Alberta; the provincial government has had a cap of its own on the books for the better part of a decade.

The Oil Sands Emissions Limit Act — weighing in at a meagre four pages and fewer than 1,000 words — outlines in broad strokes a 100-megatonne annual cap on the province's oilsands operations.

Alberta's NDP government introduced the act seven years ago as part of its broader set of climate policies but never ended up passing associated regulations that would make the cap enforceable. And, despite at one time signalling a desire to kill the act, the UCP never followed through and left the law on the books, where it remains to this day.

Call it zombie legislation. Call it unfinished business. Or, at this point, call it political pragmatism.

Even if it opposes the cap in theory, there's little incentive in practice for the UCP government to undo the legislation.

The act may also be serving as a shield against another federal policy that many Albertans see as an incursion on their jurisdictional turf — the Impact Assessment Act, also known as Bill C-69, which remains under examination by the Supreme Court of Canada as to its constitutionality.

Legislation without regulation

Alberta's Oil Sands Emissions Limit Act passed third reading in the legislature, received royal assent and came into force in December 2016.

The NDP government later conducted consultations on what associated regulations should look like, but there wasn't an urgency to come up with specifics, as applicable emissions were nowhere near the 100-megatonne limit at the time.

"Oilsands emissions were estimated to be 70 megatonnes per year," said Sharon Mascher, a law professor at the University of Calgary. "So there was there was quite a bit of room to grow, which did buy time."

Time eventually ran out for the NDP, however: the party lost power before giving the act any regulatory teeth.

Still, the act had an impact. Its mere existence in 2016 was cited by Prime Minister Justin Trudeau as one of the reasons his government approved the Trans Mountain pipeline expansion. Trudeau said Alberta's legislation was evidence of balancing resource development with climate goals.

Prior to the May 2019 election, the UCP indicated it planned to remove the emissions-cap legislation if it won power.

But after winning the election, then-premier Jason Kenney changed tack and said his government would actually keep the legislation intact.

Shield against C-69

Mascher said a key factor in all this is that killing the cap would mean approvals for new or expanded in-situ oilsands projects in Alberta would automatically fall under the federal Impact Assessment Act.

The act allows Ottawa to consider new resource development projects in environmental and social terms, including their effect on climate change.

The regulations of the federal act, however, include "an exemption for facilities in a province that has legislation in force to limit the amount of greenhouse gases released from oilsands sites."

As such, Mascher said keeping the emissions-cap legislation on the books effectively shields Alberta — to a degree, at least — from the federal law, as the province's constitutional challenge continues to work its way through the courts.

If push came to shove, she noted, the Impact Assessment Act does give the federal government the power to impose the law on a particular oilsands project. But that would require an active step from cabinet, rather than the act being automatically triggered.

Federal emissions cap looms

Meanwhile, the federal government continues work on an emissions cap of its own — one that would apply to the entire oil-and-gas sector, not just the oilsands.

While national in scope, the cap would primarily affect Alberta, which accounts for three-quarters of the sector's total emissions.

Back in 2021, Natural Resources Minister Jonathan Wilkinson said the federal government needed to bring forward its own cap because Alberta's cap "has never been put into regulation."

"We need to ensure that there's something that's actually enforceable over the long term," Wilkinson said at the time.

The federal government had previously said the details of its cap would be made public "by early 2023," but so far nothing has been released. 

Anticipating its arrival, Smith has repeatedly criticized the federal plan, saying the emissions cap would, in effect, put a cap on oil production in Alberta (although experts have not agreed with some of the numbers she has put forward.)

While we still don't know the details of the federal policy, University of Alberta economics and law professor Andrew Leach expects it will be "a more stringent policy" than the 100-megatonne cap the Alberta NDP came up with in 2016, given the climate targets Ottawa is now shooting for. 

"The federal government is talking about a tighter cap on a broader set of activities," Leach said.

And while it may seem like a strange situation for Alberta to oppose a federal emissions cap while maintaining its own cap, on paper at least, Leach sees no motivation for the provincial government to do anything else at this point.

"Without regulations, it's not doing anything. It's a cap in name only," he said.

"And I expect it's still there mostly because, as the government now, there's no need to create tough questions for yourself that you don't want to answer from international audiences. 'Why is Alberta removing the cap on oilsands emissions?' is a harder question to answer than just leaving it there."