Former Bank of Canada governor David Dodge warns of economic damage from Alberta sovereignty act

Story by Lisa Johnson • 

Alberta NDP Leader Rachel Notley (left) met virtually with economist David Dodge, former Governor of the Bank of Canada, on Wednesday December 7, 2022 to warn about the ongoing damage to the Alberta economy from Alberta Premier Danielle Smith's Sovereignty Act.© Provided by Edmonton Journal

Former Bank of Canada governor David Dodge is making a last-ditch attempt to convince Premier Danielle Smith her flagship bill will chase away investment.

Bill 1, the Alberta Sovereignty within a United Canada Act, aims to give the province the power to direct provincial agencies to act against federal laws it considers unconstitutional or harmful and is expected to pass debate in the legislature Wednesday evening.

At an Alberta NDP news conference Wednesday morning, Dodge said he’s concerned the act will undermine confidence in the rule of law in the province, which is essential to attracting investment, and called on the government to reconsider it.

“Whatever precise form that legislation eventually takes, the tabling itself creates a strong impression that investors will not be able to rely on due process in the application of federal and provincial law in the future, and lacking confidence in the future application of law in Alberta, investors then would look elsewhere,” said Dodge.

Dodge was the governor of the Bank of Canada from 2001 to 2008, and was appointed to Alberta Premier Ed Stelmach’s Council for Economic Strategy in Alberta in 2009. He was also tapped by Rachel Notley’s government in 2015 to advise it on its infrastructure priorities.

Amendments introduced late Tuesday night in the legislature would reverse some of what was heavily criticized in Smith’s sovereignty act, clarifying that cabinet can’t make changes unilaterally behind closed doors, and more narrowly defining what specific harms can be addressed under the act.

While Dodge said he had not read the text of the bill’s amendments and so declined to comment on them, the mere proposal of the act creates a perception of uncertainty.

“The act is a signal to the world that we don’t quite know what we’re doing and that we can’t quite get the fundamental stuff right,” he said.

Dodge echoes a number of business advocacy groups , First Nation chiefs , and legal scholars who have expressed concern about the bill since its introduction last Tuesday.

Dodge said the bill purports to replace the courts as constitutional arbiter, thus undermining the rule of law.

Notley said Wednesday that the UCP is underestimating the legal, regulatory, and reputational risk the bill is already having on the investment community.

“There are, without question, genuine issues that need attention between our province and the federal government to ensure that Alberta is treated fairly. Unfortunately, for the past three and a half years we’ve got a UCP government that’s been shaking its fist at clouds and not engaging in genuine efforts to bring about improvements,” said Notley.

When asked about Dodge’s comments in question period Wednesday in the legislature, Smith pointed to Postmedia coverage noting oilsands producers are directing “more capital toward their growth plans in 2023 after several years of relative frugality.”

“That does not sound like chasing business (away),” said Smith.

Under the first draft of Bill 1, if a non-binding resolution was passed by MLAs, it would have given cabinet the power to change provincial laws without going back to the legislature.

The so-called Henry VIII clause was panned as undemocratic by critics, including constitutional experts, who said it would give the premier and her ministers sweeping power without proper legislature oversight.

The legislature is expected to debate changes to the bill reversing that and pass through all stages of debate by the end of the night Wednesday.

More to come…

lijohnson@postmedia.com