Is Alberta separatism fueling Ottawa’s pipeline plans?

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So today we're asking, how did past fights over energy and climate get tangled up with separatism? Is all this talk of Alberta leaving changing Ottawa's approach now? I mean, we just got a big pipeline announcement ahead of that referendum. And then the really big if. If Alberta actually left Canada, what does that mean for the climate? So first, how much did climate and energy policy actually help to get us here? Let's start with one of the people leading the separatist movement. Mitch Sylvester is the CEO of the Alberta Prosperity Project. We asked him what role Ottawa's climate policies have played in driving separatist sentiment. As far as sabotaging our own industry, I think quite a big role. Actually, probably the most prominent role in anything else could have played. Yes, no, absolutely. That idea that Ottawa is holding Alberta's oil industry back goes well beyond the separatist movement. Successive premieres of Alberta have been believing a downturn in the economy in Alberta on Ottawa for about 10 years now. That's Chris Severson Baker, executive director of the Pembena Institute, an energy think tank based in Calgary, not the pipeline company, by the way. They're both named after Alberta's Pembena River region. Chris says after many years of boom times, things changed. About a decade ago, oil prices had fallen. Alberta's economy was struggling and Justin Trudeau's liberals came to power. You can really feel that curve. You know, I remember what it felt like when we were on the up, right? When I was in my late 20s and all the way through my 30s and whatnot. And then when we got to be about when I was about 45 and the numbers started to come back down the other way. And a lot of people really just felt that in their bones, right? They made a lot of assumptions about what their future earnings would look like. They just how they imagined their life. So even though the Trudeau liberal government expanded the Trans Mountain pipeline and oil production has hit record highs in recent years, that feeling of frustration has stuck. And according to Chris, it's fueled separatist sentiment. Setting the message that Ottawa is to blame for declining average incomes in Alberta has really created like a fertile environment for separatists to start gaining support traction in the province. Meanwhile, the debate over Alberta's resources increasingly became a fight about climate change too. Alberta's oil and gas industry alone produces more than a fifth of Canada's greenhouse gas emissions. So all of these big national climate policies, carbon pricing, environmental assessments, and oil and gas emissions cap have huge ripples in Alberta. Jennifer, what do you think of the idea that federal climate policy has been part of the fuel for the separatist movement in Alberta? So I think in many ways that's an oversimplification of the issue. I would say separation and discontent with Ottawa has been longstanding in Alberta since before Alberta became a province. And so it's not just about environmental policy or what's happening in the oil and gas sector. It really is about self-determination. That said, I do think that environmental policy and what's happening in the oil and gas sector has been a particularly acute point of tension starting in the 1980s with the national energy program and more recently. The last comment I'll make on this is that Canada is a large country and it's the role of governments to make policy choices. We're balancing economic growth against environmental protection. And so that's an inherent tension in resource development projects from the oil sands to even like data centers today. And it makes sense that there would be debates and discussion around what is the right balance between environmental protection and economic growth. We're going to get into what's at stake for the climate now as the province weighs whether to hold a referendum on separation. But first, Jen, can I get you to introduce yourself for listeners? Sure. I'm Jennifer Winter. I'm a professor at the University of Calgary School of Public Policy in the Department of Economics. I'm an economist at Studies Climate Policy. And I'm also Interim Director of Canadian Governance at the School of Public Policy. Jennifer Winter, welcome to what on earth? It's great to be here. Okay, so we've been talking about how climate and energy became part of the separatist story. But now the influence is sort of going the other way. Here's Mitch Sylvester again. It's funny though. What's changed in the last year and all of a sudden everybody's talking pipelines. We're talking about doing things for us. What happened? Like what's happened? Well, here's what's happened. We're threatening to leave and we mean it. And so as a consequence to that, we have leverage now. And as a consequence to that, they're actually talking about things that they never talked about before. Case in point, Prime Minister Karne's recent announcement about a new Pacific link pipeline. Oh, I would suggest that we're 100% responsible for that. So, Jim, what do you think? Is the threat of Alberta separation responsible for that pipeline being fast-tracked? Oh, that's a great question. I honestly have trouble believing that it is all Alberta's separatist movement. I think it's very clear that Prime Minister Karne is a different Prime Minister than Prime Minister Trudeau. And Prime Minister Trudeau is very different from Stephen Harper before him. And I think this gets to this tension about economic development versus environmental protection. We've gone through a series of pretty substantial economic shocks. COVID, Russia's invasion of Ukraine disrupting supply chains even further and energy markets, all increasing costs, second Trump administration's tariffs. And so it's no surprise that in response to all of these shocks, we see greater focus on economic development and protecting lives and livelihoods. A good reminder of how much is going on in the global stage right now. Let's talk about what impact the referendum might be having in the province right now. What do we know about how the talk of separation might be affecting Alberta's economy specifically its energy sector? Yeah, so separatist sentiment, it creates uncertainty. We don't know what's going to happen in the next few years. We don't know the outcome of the referendum. And uncertainty is bad for investment, whether it's the oil sands, whether it's in housing or if it's renewable energy. So the best current example of the effects of separation is Brexit. So it's had a significant negative effect on the economy that was underestimated at the time that the UK was considering Brexit. So I think we can easily say that there's going to be a definite slowdown on investment and economic activity in Alberta until this uncertainty is resolved. So interesting. Ferman Latimer is the founder of First Nation Power Development, which works with First Nations on renewable energy projects in Alberta, NBC. Here's what he told us about how he thinks the referendum is affecting his work. He says, "Refrendums always create uncertainty." You saw it in the Quebec referendum, these companies that are headquartered that believe in the Canadian economy don't really want to be investing a lot into those provinces where there's a lot of uncertainty. Yeah, so I think in general it's driving out investment, it's creating uncertainties for everybody, all in the shoes I want to say that are involved, especially the renewable energy industry. Jen, what comes to mind for you when you hear that? I agree 100%. And I think part of the uncertainty is say the referendum turns out in Alberta is moving towards separation. There's constitutional negotiations about what happens in Alberta. What share of federal debt will take on, but I think even more fundamentally is what will the rules of the game be for economic development, for renewable energy projects, for the oil sands? What will be the environmental protection laws? So let's talk about what's next. Say the majority of Albertans who vote on October 19th vote to begin the legal process to hold a binding referendum on Alberta separation. What impact could that have on Alberta's economy and the energy transition specifically? So I think in the worst case scenario there's just a full pause on any investment in Alberta until that uncertainty is resolved and until the determination of what will be the rules of the game, once Alberta fully separates, what currency will we use? How will banks operate in an independent Alberta? All of this in the worst case scenario means that there's no foreign capital flowing into Alberta. There's a pause on investment and we could also see flight of highly skilled workers that are necessary for the energy transition. So that's sort of the worst case scenario. I think a best case scenario is much of the same, but the uncertainty is resolved very quickly and Alberta is able to recover and that's probably a scenario where an independent Alberta is promoting investment, promoting economic opportunities, and so that means a very aggressive government, say industrial policy to support new investment. Okay, so on the other side, if the remain side wins, what does that mean for the climate and energy conversation in Alberta? Oh, I think what it means for energy and climate policy in Alberta really depends on the strength of that remain vote. If it's very close, we can foresee a state of the world where the discontent continues and the separatist momentum continues, and so this is continually an issue, say like we've seen in Quebec for the past several decades, and that continued separatist sentiment is like, it's always there. You know, always present, that creates long-term uncertainty. And I think it also means that because there's always this conversation about will Alberta separate? Will it not? There's going to be a lot of policy focus on that and lawmaker focus on that, and you know, that means with finite capacity and attention spans, there'll be less time spent on other policy issues that are, I would say, equally important. And so again, like that's sort of a worst case scenario from the Federalist side. That's case scenario from the Federalist side. It's an overwhelming majority of Albertans vote to stay in Canada, and the question gets put aside, and I think that the separatist groups they're likely going to stick around, but probably a lot less popular. One summer evening when she was 20 years old, something terrible happened to Vienna Luke. I can't figure it out, but I do know that it was a violation. Then people started asking questions. What a creep! Who else knows about this? From CBCs, personally, this is Agent Leila. The story of how a victim went undercover. So bring it on, let's go, let's get a confession. Available now on CBC Listen, or wherever you get your podcasts. Jen, I'm going to get you to help us imagine one more possible scenario, and that's the possibility of separation. And I just keep picturing this international border around Alberta and everything that crosses it, oil and gas, electricity, rivers, wildfire, wildfire smoke, the greenhouse gases. Jen, you were part of a group that analyzed the potential economic impact of Alberta, actually moving ahead with separating from Canada. What are the climate environmental implications of that? Yeah, I think it's easy to talk about the economic implications. We can fairly easily quantify the effects on GDP and employment. The effects on climate and the environment are much more conceptual, and my biggest concern is what the government of Alberta would need to do to build up capacity. There's a lot of complicated machinery of government that we don't really see. For example, environment and climate change Canada does weather and climate forecasting, and so that's tornado warnings, thunderstorm warnings, etc. These are all important for lives and livelihoods. So in a scenario with a separate Alberta, that's a long-term capacity challenge to build up. You don't find meteorologists and climate science and modelers on trees, right? And so this is something new that the government of Alberta would need to do. And so that's something that would affect people day to day, and more broadly, some of Canada's environmental protections are with the province of Alberta, and some of the environmental protections are with the government of Canada. And a separate Alberta would need to decide if it's going to adopt wholesale, what the federal government does, or if it's going to go a different direction and develop its own policies. And so in the event that it goes for its own laws and regulation, that means that there's a period where there might not be full environmental protections in Alberta, and that can have environmental consequences. It's from like emissions to water quality to air quality. It would also support much more economic development, which some people would be really happy about, but it would have negative consequences for the environment. We also asked Chris, Severus and Baker, from the Pemana Institute, what an independent Alberta could mean for oil and gas development. Take a listen. It actually won't be easier to build pipelines or export oil and gas to other markets. It won't be easier to attract investment to Alberta if Alberta were to separate. You know, the notion of separation, let alone actually separating would result in more difficult time attracting investment to the province. So that actually would result in lower emissions as well, if that were to happen. Jennifer, could an independent Alberta actually mean less oil and gas production? Yeah, it's possible. I don't entirely agree with Chris's point, and that I think anything is possible if governments are willing to throw enough money at it, right? And so in the case of, say, investment in oil and gas is lackluster and production is declining, the government has lots of vehicles to encourage investment, to changing the royalty system, to be more beneficial to production, changing the tax system, to be more beneficial to investment. I mean, we've seen that with the government of Canada recently with the productivity super mega deduction. I can't, yes. I mean, mega's. Yeah, right? So, so governments have tools to encourage investment and the natural consequences foregone tax revenue. And if they're willing to accept that as a consequence, I think we're not necessarily going to see a world where oil and gas production declines. That said, very little of it is within Alberta's control, really. Alberta can control its tax system and the project approval and permitting process, but a lot of what determines how much investment there is in Alberta oil and gas or how much production is depends on global markets and global demand for oil, you know, not to mention ensuring that there are pipeline routes out of a landlocked Alberta. Okay, so Jen, what's your biggest concern as the referendum approaches? My biggest concern is that separation is incredibly complicated and it's going to be a long process if it goes ahead. And I think voters are perhaps naive at the extent to which I like how complicated it would be for Alberta to exit Canada and how complicated it would be for a separate Alberta to maintain the level of public services and government support that we enjoy as Canadians. There is a group of people that are characterized as soft separatists that are not like very serious about Alberta leaving Canada, but are concerned enough about federal policies that they view this as a vehicle for sending a message. And that could have significant unintended consequences, especially given that they are not actually in favor of separating. And I think there's perhaps more effective ways to send the sort of message that they're looking for. Jennifer Winter, thank you so much for this conversation today. - Been my pleasure. Thank you for having me. (upbeat music) Jennifer Winter mentioned environmental protections and things like weather and climate forecasting, all costs that an independent Alberta would have to shoulder if it separates from Canada. Mitch Sylvester told us it's about more than just money. It's important to him that Albertans get to decide how their tax money gets spent. - We're the only province in Canada that pays more than what we get back. So what I'm trying to tell you is we're paying for it already and we're more than paying for it, right? At least this way we have a chance to control where the money is spent. - Like Jennifer said right at the beginning, for some Albertans, the push for independence is all about self-determination. For his part, when it comes to Alberta energy and its prosperity, Prime Minister Mark Carney has said the best place for Alberta is in Canada and says the recent announcement about the Pacific link pipeline demonstrates that quote, "Canada is working." He says the project is possible because the country as a whole will come together to support it. We did reach out to the federal government for a response to some of the issues we've talked about today. We did not hear back by our deadline. And this is obviously a story that's still unfolding but we do know the conversation is already shaping debates around energy and climate policy. So we'll keep watching what happens next and what it means for the climate. And if you want to keep going right now, check out CBC's west of center for a deeper dive into the politics shaping Alberta. You can find it wherever you get your podcasts. One more thing on my radar this week. Okay, two more things, it was a big week. The Kelvin wave. If that phrase has suddenly started showing up in your feed, welcome to one of those wonderful moments where a deeply nerdy meteorological term goes viral. And no, it's not some giant wave about to crash onto the west coast. It's actually more like the Pacific ocean sloshing around in what's essentially a giant bathtub. Normally, winds push warm surface water toward Asia. But during El Nino, those winds weaken and some of that water starts moving back towards South America. When it reaches the coast, it has nowhere else to go so it travels north and south as this enormous, almost invisible bulge in the ocean. Scientists are tracking it right now. It's reached Southern California and will be up in BC by late October. That swell can raise sea levels by tens of centimeters, which might not sound like much until you add a king tide or a coastal storm in. Suddenly that extra water can mean flooding. And with climate change already raising the baseline sea level, there's less room for air. And if you caught our whole episode on El Nino, consider this a bonus chapter from the Pacific bathtub. I've also been thinking about heat pumps because Ottawa has announced $2 billion in rebates to help homeowners install them. In case you missed it, heat pumps are a clever climate solution with a bad PR name, in my opinion. Instead of generating hotter cold air, they work by moving heat around, pulling warmth from outside into your home when it's cold, then reversing the process to cool it in the summer. And yes, there is still heat in the air when it's cold outside, physics, man. So they can help cut emissions from heating cooling our homes and help us adapt to increasingly hot summers, two jobs at once. The catch, the upfront cost can be a huge hurdle. We got one after the heat dome and boy, it cost a lot, which means we can't replace our 70s shag carpets for 20 more years. But hopefully this new federal rebate can help some listeners save money. The program is expected to launch in early 2027, homeowners will be able to apply for the rebate when their existing heating system breaks down or when they plan to replace a heating system that's approaching end of life. The rebate can be up to $10,000 for households below the median income. Other households can claim $2,000. Something to keep in mind the next time your furnace gives up. (upbeat music) That's it for this week. You can find what on earth wherever you get your podcasts. New episodes are in your feed every Saturday. If you're a fan of the show, spread the word, pick your favorite episode and share it with a friend. And for even more great listening, check out the latest episode of our sister show, Quirks and Quirks, where I'm a guest. That's right, I'm switching seats and letting the legendary Bob McDonnell ask the questions. I've got my meteorologist hat on talking about how cuts to the weather service in the US are affecting the work we do here in Canada and ultimately your forecast. The what on earth team includes Molly Siegel, Rachel Sanders, Matthias Wolfson, GP Mendoza, and Catherine Wolfson. Special thanks this week to Alice and Dempster. I'm Johanna Wagstaff, we'll see you next week. On what on earth? For more CBC podcasts, go to cbc.ca/podcasts.