Municipal-federal deals to face provincial oversight under proposed Alberta law

Any agreement between the federal government and an Alberta town, school board, university or other provincial entity will need to be vetted by the provincial government, should the legislature pass a new bill.

The Provincial Priorities Act was tabled in the legislature Wednesday by Premier Danielle Smith. It is framed as a step to prevent federal interference with the Alberta government's priorities.

"We need to change the relationship with the federal government because they are doing an end run around us," Smith said at an embargoed news conference Wednesday.

Just how many agreements could be affected, how long it would take the province to review each agreement, and what kind of agreements would be exempted, provincial officials said they have not yet decided. They said the law is not intended to block minor agreements, such as a grant for festival fireworks, or leasing a tiny parcel of land for a Canada Post mailbox.

Smith said government officials have tallied about 14,000 existing agreements between the federal government and provincial entities. Around 800 of those were "flagged as problematic."

The Act, modelled after a similar law in Quebec, would mean the Alberta government be involved any time a provincial entity wants to create, amend, extend or renew an agreement with the feds.

School boards, post-secondary institutions, health authorities, municipalities, Crown corporations, and provincial management bodies would all have to follow a new provincial approval process, and failure to do that would make any agreement with the federal government void, the bill says.

Once the law is passed, the province would consult with these entities to decide the best way to organize the review process and set exemptions for funding agreements that would not require the province's approval. The government has ballparked early 2025 for the law to take effect.

Quebec's law does not apply to post-secondary institutions. Smith said those agreements also require provincial oversight in Alberta because the federal government is making political decisions about which research projects to fund.

"That they fund in a certain way, based on a certain ideology, and that's what we're going to be able to determine once that becomes a lot more transparent," Smith said.

The premier said she is most concerned with the federal government clashing with provincial priorities by imposing green standards on new housing construction, a 2035 goal for a net-zero electricity grid and the provision of a safe supply of opioids for people with profound addictions.

In a background briefing, Alberta officials said they have no consequences in mind for entities that would thwart such a provincial law, but hope that a law would deter the federal government from proposing agreements without provincial involvement.

Smith and Municipal Affairs Minister Ric McIver said if passed, the law would help the province's municipalities get a "fair share" of federal funding by participating in negotiations, and distributing money equitably across Alberta.

Smith pointed to federal housing funding agreements she alleges are being disproportionately spent across Canada. She said the federal government is politically meddling with communities by requiring them to change zoning bylaws as a condition for the provincial government to receive new federal infrastructure funding.