Alberta tables gatekeeper bill on federal funding, cites housing money as last straw

EDMONTON — Alberta Premier Danielle Smith has introduced legislation to gatekeep and if necessary veto any future deal struck between municipalities and the federal government.

Smith says the final straw was recent federal housing grants to some Alberta cities that were made without her government’s involvement.

Smith also says the bill, introduced in the house Wednesday, acts as a bulwark against Ottawa muscling in to fund federal ideological priorities — such as safe supply addiction treatment and green power mandates — that run counter to her province’s objectives.

“It’s come to a head in the last month, because they’ve been so outrageous and egregious in how unfairly they’re treating our province and how unfairly they’re treating our municipalities (on housing),” Smith told reporters before introducing the proposed provincial priorities act.

“The federal government is picking favourites. 

“They’re not giving us our fair per capita funding, and they are making municipalities jump through a bunch of hoops and agree to a bunch of onerous conditions in order to be able to receive it.”

In recent weeks, Ottawa has announced millions of dollars in grant programs with Calgary, Edmonton and smaller municipalities under its Housing Accelerator Fund.

The fund goes to municipalities proposing innovative ways, such as zoning and planning changes, to get more affordable housing built.

Federal Housing Minister Sean Fraser said last month the fund is tied to innovation and not population. He said multiple municipalities are benefiting, and Alberta is getting close to its 12 per cent per capita share at around $450 million.

Smith said the aggregate housing money amounts to less than Alberta’s per capita share and falls far behind what other provinces are getting.

The bill is the next chapter in a long-running war of words and court battles between Smith’s United Conservative Party government and Prime Minister Justin Trudeau’s Liberal government.

Alberta has accused Ottawa of repeated intrusions into provincial areas of constitutional authority, particularly when it comes to energy industry regulations and rules to green the electricity grid. Smith has also questioned Trudeau’s dental care and pharmacare programs.

Under Wednesday’s priorities bill, any entity that is regulated by the province would not be allowed to enter, renew or extend a deal with Ottawa without approval from the province.

It would apply to a sweeping range of provincial bodies, including municipalities, post-secondary schools, school boards, health authorities and other Crown-controlled organizations.

“Any entity that we regulate has to follow these rules,” said Smith.

When asked whether the bill could open the door to political interference in post-secondary research projects by her government, Smith said she’s worried the federal government already uses its spending power to fund ideologically driven work.

The bill mirrors similar legislation in Quebec. 

Alberta’s proposed law would not apply to existing deals but to all agreements if it comes into force, which is expected to be early 2025.

Randy Boissonnault, the Edmonton-Centre MP and lone Alberta representative in Trudeau’s cabinet, said the bill is about command and control.

“The premier wants to be a gatekeeper and use those funds for her own priorities,” Boissonnault, the employment minister, wrote on social media.

Edmonton Mayor Amarjeet Sohi said having municipalities wait for the provincial government’s OK will stifle economic growth and stall infrastructure projects.

“We’re going to have millions and millions of dollars that we’re currently able to access from the federal government that could potentially be at risk,” he said.

Smith’s government has yet to outline the details of the new approval process, and plans to consult with those affected before writing the specific rules and regulations.

Government officials have said the law likely won’t apply to money for small budget line items such as Canada Post mailboxes or Canada Day festivities.

Alberta Municipalities president Tyler Gandam has said if the change results in more bureaucratic hurdles, he wouldn’t support it.

The UCP government has made red tape reduction a core value and created a ministry for red tape reduction.

Smith and Municipal Affairs Minister Ric McIver said the law won’t create more red tape because, if applied properly, would create a one-stop funding shop for the federal government rather than having Ottawa work with individual agencies and municipalities.

“This will take essentially no time at all,” said McIver, who added it could help local authorities leverage more funding from Ottawa.

NDP Opposition Leader Rachel Notley said Smith’s plan will wrap municipalities in a “spool of red tape,” block Albertans from getting their fair share of federal dollars, and perhaps force municipalities to hike taxes to cover the shortfall.

“This is really nothing more than a partisan, petulant temper tantrum on the part of this premier,” Notley said.

This report by The Canadian Press was first published April 10, 2024.

Lisa Johnson, The Canadian Press