Varcoe: Kenney says sovereignty act would deliver 'body blow' and drive investment, workers away from Alberta

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The Alberta government is going to spend $2.6 million trying to attract talented workers in the lower B.C. mainland and Toronto area to pick up and move to this province.

But as his days in office wind down, Premier Jason Kenney is also spending some of his attention discussing another issue: the economic ramifications of the Alberta Sovereignty Act pitched by Danielle Smith, one of the front-runners in the race to replace him as UCP leader.

On Saturday, he derided the concept of not enforcing federal law as “nuts” while speaking on his weekly CHQR radio program.

On Monday, Kenney told reporters the idea would deliver a “body blow” to government efforts to create jobs, get pipelines built and expand the economy.

“It would massively drive away investment. It would cause people to leave the province and businesses not to come here,” Kenney said.

“Here we are launching a campaign for Canadians to move to another part of Canada. And if Alberta were to decide, effectively, to launch a separatist project, I think that would automatically exclude a lot of Canadians.

“To the contrary, instead of being able to attract people, we would start hemorrhaging people.”

Smith was not available for an interview Monday, but said in a Twitter post she will trust the judgment of party members and Albertans “having the final say in this matter.”

On Monday, the UCP government rolled out details on its new “Alberta is Calling” ad campaign, designed to entice workers in Vancouver and Toronto to consider relocating to the province.

It touts cheaper housing prices, shorter commute times and the ability of workers to find a job in Alberta. More than 100,000 positions are now open across the province.

For the business community, the twin issues of talent attraction and investment certainty are critical for the future.

A new survey of businesses by the Alberta Chambers of Commerce found labour shortages remain a key concern for many companies.

Completed last month, the poll indicates 62 per cent of business operators say they’ve experienced moderate or significant staff shortages.

“Those are some pretty big numbers and almost half of those businesses are also considering hiring outside the province to grow their workforce,” said Alberta Chambers CEO Shauna Feth.

While a campaign to attract new employees will be welcomed by businesses, it’s the investment discussion around Smith’s sovereignty act that’s grabbing headlines as the UCP leadership contest moves into the final stages. A new leader will be announced on Oct. 6.

The province has a series of major private-sector projects worth billions of dollars in the works, in areas such as petrochemicals, carbon capture and storage, renewable power, agri-food and technology.

Calgary Chamber of Commerce president Deborah Yedlin criticized the Alberta Sovereignty Act, saying it could lead to capital shifting to other places.

“Just from a purely capital market, investment certainty and economics perspective, this makes absolutely no sense,” Yedlin said in an interview.

A statement issued by Smith’s campaign on the weekend called the premier’s initial comments “premature, ill-informed and disrespectful” to a growing majority of UCP members who, she said, support the initiative.

“Perhaps the premier and other ‘experts’ should reserve their opinion on this legislation until they can actually read it first,” Smith said.

Of course, there is no such legislation to review right now.

According to Smith’s campaign video about the act — an idea pitched as part of the Free Alberta Strategy last year — she would introduce legislation on her first day as premier. It would authorize the province “to refuse to enforce any federal law or policy that attacks Alberta’s interests or our provincial rights.”

Some legal experts have dismissed the idea as unconstitutional, while business experts say the policy would create uncertainty for companies looking to make long-term investment decisions.

Paul Varella, a professor of business strategy at Mount Royal University, noted in the 1970s and ‘80s, political instability created by the Quebec sovereignty referendum and debate led to companies fleeing that province — a point Kenney also made.

“We are a landlocked province of 4.5 million people. So we, by nature, depend on Canada, the continent and the globe to be a global player,” Varella said.

“Money is agnostic. Companies invest based on their return on investment and every time risk goes up, it challenges the opportunity to pay back their invested capital.”

During his news conference, Kenney was blunt, blasting the idea. The outgoing UCP leader insisted he wasn’t wading into the leadership race to influence it, although it seems his remarks — made twice within three days — could do exactly that.

Mac Van Wielingen, founder and partner with ARC Financial Corp., said the broader backdrop to the discussion is important, as the country has already lost some foreign investment in the energy sector in recent years.

In part, it’s because of federal policies and regulations, such as Bill C-69 and Bill C-48, and regulatory delays. He’s also heard from foreign investors discouraged by other policy moves, such as Ottawa putting a windfall tax on the Canadian banking industry.

As for the sovereignty act, he said much of its impact would depend upon the approach of the provincial government, if it passed such a bill.

Companies contemplating major capital investments would want to speak directly with the premier and get reassurances before proceeding, noted Van Wielingen, who is also chair of the Business Council of Alberta.

“There is risk. It is something that should be taken very seriously and it would really depend on how we manage ourselves and how it’s explained to the rest of Canada and how it’s explained internationally to investors,” he added.

“That risk could be managed. But I think it’s valid to be concerned about it.”

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@postmedia.com