The Q&A: "I do want people to feel confident that Canada can work"

Alberta Premier Danielle Smith on a bunch of referendum questions

I mean what I say at the top of this interview, about how easy it is to get an Alberta premier on the line for an interview. I live in a town where some people break out the slide rules and the security blankets every time they get invited to field some questions in public, but Rachel Notley, Jason Kenney, Danielle Smith and the late Jim Prentice almost never hesitated to advocate for their policies when I asked. It’s greatly appreciated.

Smith has announced nine referendum questions for a vote in October. One of my questions was how those questions, which all assume long legislative and in some cases intergovernmental processes that Alberta would launch as a province, interact with a likely tenth question, about whether Alberta should simply leave Canada. I don’t think I caricature the premier’s long answers unduly when I say, we’ll just kind of have to see how they interact.

I take Smith to be a pro-Canadian federalist who is trying to surf and dissipate strong separatist sentiment at the heart of her voter coalition, as did Ken Boessenkool in this space a few days ago. She says so, nearly in those words, a few times in this interview. I think she’s taking the really long way around to defending Canada, but everyone brings their own style to the game.

A few points of information. I refer in the interview to a December ruling by Justice Colin Feasby of the Alberta Court of King’s Bench that found the proposed secession referendum unconstitutional. While Feasby was writing his decision, to his considerable frustration, Smith’s government introduced new referendum legislation that would permit the secession question and just about any other. But the new law explicitly isn’t a promise that the Alberta government will do whatever some petitioners ask. From an explanatory paper the government released with its bill last year:

That bill amended Alberta’s Referendum Act as follows. Note subsection (3).

By amending the Act, Smith’s government essentially took the evaluation of referendum questions’ constitutionality out of judges’ hands and made it a responsibility of the provincial attorney general. But Feasby’s analysis, that the question at hand could not produce a constitutional secession, still stands, and would guide any judge in the event of any post-referendum legal challenge to a secession attempt. My read of Smith’s answers to my questions is that she’s perfectly aware of this.

Smith also talks about equalization, with frequent reference to Quebec. Quebec is the largest total recipient of equalization payments, but as even this page that complains about equalization from an Alberta perspective acknowledges, that’s because Quebec has a large population. Per capita, Quebec is a distant fifth among equalization-receiving provinces.

Smith spoke to me from Edmonton. This transcript is lightly trimmed, but you can watch the whole interview in the video above.

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Paul Wells: I don’t know what it is about Alberta premiers. You’re the fourth consecutive premier who’s happy to talk to me whenever I ask, and I appreciate it. Thanks very much.

Danielle Smith: Well, thank you for being interested in what’s happening in Alberta. I know that sometimes our issues are a little bit more provincial, but sometimes they rise to the level of national interest, and so thanks for your interest.

PW: This is one of those times. I’m awfully curious, and I know a lot of my readers are, about these nine referendum questions that you have announced a vote for in October. Nine’s a lot. What led to this?

Smith: Some of it was the deep dive that we’ve done on trying to understand the population flows coming into our province. You have to remember when the “Alberta is Calling” campaign started just before all the COVID restrictions ended, we were really worried, because we had a number of large projects and we were worried that we wouldn’t have the skilled tradespeople. So we began the program by saying, let’s advertise in areas of high unemployment so that we could get the welders and the electricians and the carpenters to come here. We even created a special tax credit so that if somebody relocated here, we would rebate them $5,000 on their taxes the first year.

We didn’t know that what was happening simultaneously was that the federal government was taking restrictions off of all of their different streams. Eighteen months in, we started looking and saying: what is going on here? We got way more of a population flow coming into our province than we had ever seen before, literally. We had 600,000 people come in the last five years. I think the only other jurisdiction in the world growing faster than us is South Sudan, and that’s because of civil war movements. And so, what we needed to do is say: are we seeing a large number of taxpayers coming in, or are we seeing a large number of program beneficiaries coming in?

And what we are seeing is that the level of pressure on our program spending far exceeds the population growth. When we’ve had these kinds of high-growth periods in the past—and I’ll go back to maybe 2008—we saw a 24% increase in GDP, and about 11% population growth. Now we’re seeing a 13% increase in population growth, and only an 8% increase in GDP. So something has fundamentally switched, and that’s why we wanted to ask our people whether or not we needed to take a little bit more control over immigration, as we’re allowed to under Section 95 of the Constitution. But because it’s such a change in direction from where I began, I wanted to make sure I had a direct democracy mandate from the people to make some of these changes.

PW: Five of the referendum questions call for changes to Alberta’s own legislation. Four of them call for negotiation with other provinces towards constitutional amendments. First of all, do you need a referendum mandate to do any of that? You can change your own laws, and you can call Premier Moe this afternoon.

Smith: We could change our own laws, but as I said, it is a bit of a departure asking people if they want to, have, for instance, temporary workers, guest workers, pay a portion of their own cost for healthcare, education, and other social services, or should we say that they can’t be eligible at all. That happens in other jurisdictions around the world, but it’s not something that we’ve done in Alberta before. We’ve never had a citizenship requirement on our provincial elections. We haven’t had to produce citizenship, and so we want to ask people if they’re okay and comfortable with that. The reason why we want to get the mandate is because these were not things that were even contemplated when I first got elected. I suppose we could wait two years until there’s an election, but this is why we have referendum: to do that check on our direction and see if it has the support of the people.

When it comes to the other, constitutional ones, you may recall that I went through a process of the “Alberta Next Panel”, and the reason we did that was just the great frustration Albertans had after seeing the Liberals get another government mandate. We saw separation intent rise to 42%. I thought, I need to understand what’s going on here. What are the pressure points? What is causing so much grievance with Albertans? And so immigration emerged as a very strong, across-the-board problem that people identified in my town halls.

But then when it came to finding a way to reset our relationship with Ottawa, issues around appointing judges, whether the Senate should exist at all, having our laws take precedent when there is a dispute in areas of provincial jurisdiction, and being able to do what Quebec does, opting out of federally funded programs and still getting the dollars flow through to us, those are things that we think would help to reset the relationship with Ottawa, and I hope, give Albertans hope, once again, that Canada could work.

So those are the things we put forward. A little more complicated to get constitutional change, because you either need to have consensus among all the provincial premiers in some cases, or 7 out of 10, representing 50% of the population. But I’m prepared to do that work and see if we can get those kinds of consensus items moving forward to see if we can make some changes.

PW: Will those nine questions be the only ones that Albertans are asked? My understanding is that the proposed secession referendum could be a tenth question, and that this “Forever Canadian” initiative that Mr. Lukaszuk started, and then…seems uncertain how to proceed. You may have simultaneous questions: Do you want to leave Canada? And another question saying, Do you want to stay? Have I got that right?

Smith: Yes, and there’s another one that is in process. Corb Lund has started one on the issue of coal development, too, so if that gets the requisite number of signatures, that would go on as well. The “Forever Canadian” one, as you mentioned, is in a little bit of a different territory, because the proponent initially said he wanted it to go to referendum, that was what the petition said, but then after he got the signatures, he said he just wanted it to go to a vote of the legislature. So we’ll establish an all-party committee on that one, and get them to assess what we should be doing with that one. Meanwhile, I am waiting to see if the Independence Referendum Citizen Initiative gets the requisite number of signatures. They have until May the 6th. I have said that anything that does pass that bar would also be added to the referendum date on October the 19th.

PW: My understanding of the current legislation—and this is from reading it—is that Alberta’s government is not required to implement the results of a binding referendum if doing so would contravene Canada’s constitution. Would the secession question meet that test, or would it contravene Canada’s Constitution?

Smith: Well, I think the Supreme Court has weighed in, and the Clarity Act was a response to that, and I don’t think the Clarity Act just applies to one province, I think it applies to all. As I understand it, it would have to be a clear answer to a clear question, and you’d need a clear majority. I think there’s two parts to that- you must have a high enough voter turnout that you really are gauging the sentiment of your entire population. And it would also have to be significant, probably more than just one vote above 50%. I don’t know what the court would determine, how much more than what the significant majority would need to be, but those would be how I would think that the court and the legislation would be interpreted. But there is already a framework for Quebec to have these kinds of discussions, and so I imagine the proponents of this have felt that that legislation and frameworks should apply in Alberta, too.

PW: Yes, but there was also Justice Feasby, the Alberta judge who said the day after you introduced the new referendum law that he was already considering the question at hand— the secession question that the proponents have proposed—and he said that that question would contravene the Constitution because it provides no guarantee of basic rights under the Charter, and because it doesn’t sufficiently protect Indigenous rights because Alberta is not a party of the numbered treaties.

You’ve already got a judge who has said that the question at hand, wouldn’t meet a constitutionality test. Does your Attorney General disagree? Does your Attorney General plan to pronounce on the constitutionality of this question before Albertans are asked to vote?

Smith: Well, I think we’d have to see, first of all, if they get the number of signatures, and then we’d have to see what the construct was of the “Forever Canadian” question as well, which is equally problematic, because if you’re asking a question, do you want to remain in Canada? Yes? No? What does “no” mean?

I think you have to be very clear about what “no” means before you put it on a ballot, so that’s another thing that the committee has to consider. I’m going to let the process play out. What we wanted to do with Citizen Initiative is not have a bunch of gatekeepers prejudging whether something should or should not be asked. We wanted to see if something had enough expression of support, and then it’s up to us to put forward a question that would be constitutional and to implement them if passed in a constitutional way. So, no, that work hasn’t yet been done by the justice minister, because we’re waiting to see the result of the petition to see if it even does get the requisite number of signatures, and we’ll know that in a couple of months.

But presumably, the Parti Québécois is going to have some of these same scholars weighing in in the same way, because they’re proposing that they would have a similar question, and there have been a couple of instances in Quebec where questions have been put forward in the past, and so it’s for legal scholars to talk about, whether it regards Alberta or whether it regards Quebec.

PW: I spent a large part of my young adulthood sitting in courtrooms listening to scholars weigh in on precisely that and let me tell you, opinions are strong.

I’m also wondering whether population growth is the main source of Alberta’s budget difficulties. In your 2025 budget, a year ago, you had a budget that projected 2.5% population growth in 2025, and 1.4% in 2026. Your most recent budget projects the same [population] growth for 2025, and you are now projecting the same or lower population growth in 2026 [It’s actually projecting 1.1% growth for 2026, substantially lower than the projection a year earlier. I got this from Trevor Tombe — pw].

You projected a certain budget balance a year ago and you’re now projecting a much worse budgetary balance, but your population projections haven’t changed. It seems to me that the numbers have gone out of whack due to something besides population growth.

Smith: I don’t just blame one thing. I look at three factors. One is the volatility in oil and gas revenues, and that has been a perennial problem for Alberta. We are over-reliant on oil and gas revenues on our budget, and so when oil is at $74 or $80, whatever it happens to be today, that puts us in surplus territory, and when it’s at $61, which is what we anticipated it being at for this budget, that puts us in deficit. That’s the level of volatility that we’ve been trying to manage, and that’s what I wanted to prepare the public for. We have a structural deficit if oil is at $60 a barrel. And if oil is going to be at $60 per barrel, that is something that we’re going to have to grapple with.

How do we get our budget into balance? We can’t just keep waiting for windfall revenues to bail us out. That’s one part. But the reason why I’ve started investing in the Heritage Savings Trust Fund is to do exactly that. I’ve been asking for this for decades. We should just keep on investing the investment income in the fund at a bare minimum. We started doing that in 2022, and we’ve doubled the size of the fund. It was $16 billion in 2021, it’s now $32 billion and growing. If we can just keep with that strategy of reinvesting income when we get surpluses, and it grows to $250 billion by the time we hit 2050, then yes, from time to time, when we’re hit with a $15 billion reversal in oil revenues, we’d be able to tap into that fund to augment it. That’s one strategy, but that’s a long-term strategy.

The midterm strategy is new revenue sources, and that involves getting more expansions on our pipeline growth, so we’ve got more volume. It involves building out more of our natural gas internally so that we can fund data centers as a new revenue opportunity. We’ve developed iGaming, following Ontario’s lead as a new revenue opportunity. We’re adjusting some of our user pay fees so that that’s not funded out of general revenue, it’s funded by the people who use services. Those are some of the things that we’re doing on the margin. We’ve got a plan for $25 billion in tourism income. It’s why we’ve added an additional vehicle rental tax, and we’re, also bringing through an increase in our tourism tax so that we can capture more revenue from the visitors who come to our province. That’s a second stream.

But make no mistake, the cost of guest workers on our healthcare system, our education system, and our other social services is significant. We did a deep dive in looking at the complexity of our classrooms to understand what has happened in our student population in the last four years. And we have gone from having 47,000 students who were English- language learners to over 100,000 students. Of the temporary guest worker category, we have about 45,000 students who have parents in that category. That costs $600 million to taxpayers. And then, if you look at the total of 282,000 guest workers, that is a cost of about $6,800 per person on healthcare, so about $1.9 billion.

$2.5 billion on people who have not made a permanent commitment to our province and our country to be long-term taxpayers and arriving with more cost to our system than tax revenues that they generate, that’s a problem. That’s not what used to happen. We used to lead with bringing in economic migrants, they would be taxpayers for a few years, they would commit to becoming permanent residents, then they’d bring their families over, and they’d be able to build a life here. But we shouldn’t have people who are here temporarily bringing spouses and families and putting a greater burden on taxpayers than they’re generating in revenue.

That’s the question that we’re putting forward. It is a very significant portion of our cost—probably about a third of the deficit that we’re looking at. And I might also say that we are rebalancing the conversations with the federal government. Our people are very, very aware that we generate $26 billion more in the various federal taxes than the federal government reinvests back in our province. And when we see that Quebec, year after year after year, continues to get more and more equalization, and that Manitoba has doubled the amount of equalization—they were at $2.5 billion, now they’re $5 billion—Quebec is at $14 billion, that really sticks in Albertans’ craw. That we can’t afford to pay for our own social programs, and yet the federal government is taking the surplus revenues derived from the activity in Alberta to subsidize the programs in Manitoba and Quebec. That doesn’t make a lot of sense. That’s part of the reason we want to keep more of those dollars in Alberta as well.

PW: Albertans have already been asked about that, and in 2021, they voted to remove equalization from the Canadian Constitution. I just read the Constitution and equalization is still there. If a referendum didn’t help in 2021, why would it help in 2026?

Smith: I think we’ve got a bit of a recalibration happening across the country, and part of it was the election of Donald Trump in the United States. Everybody realized that the relationship we have with the United States isn’t as secure as we thought. Maybe we should trade more with each other, and help each other out a little bit more, and that’s, I think, part of the spirit that has come to the table. I think it’s part of the spirit that led to the change in leadership in the Federal Liberal Party, and so we’re having a lot of the grievances that I’ve been raising over the last 3 years finally addressed.

It may well be that the predecessor to Mark Carney ignored us, but I’m hoping to have a more constructive relationship and more constructive conversations with this Prime Minister on a whole range of fronts. It hasn’t all been for naught, though, because I can tell you that Newfoundland and Labrador came to the same conclusion. They said, why are we, as one of the provinces with the smallest population transferring more dollars to Ottawa so that it can go to subsidize bigger provinces? They launched a legal challenge over it, and both British Columbia and Saskatchewan joined the challenge, because they’ve got the same grievances.

Why should Saskatchewan, a smaller province than Manitoba, be sending money to the center so it can be spent in Manitoba? That doesn’t make any sense. Why should BC and Alberta be in the same position, where we’re subsidizing Quebec in some years, and Ontario in some years? And why should Newfoundland and Labrador be in a position where they’re subsidizing their much larger neighbors in the Atlantic provinces? I think it’s an important conversation that we’re having about why we need to get back to the principle of equal per capita transfers as opposed to having this one special program that seems completely disconnected from the growth in those economies. Manitoba and Quebec both have growing economies. There’s no reason their reliance on equalization should be increasing, it should be decreasing. There’s something foundationally wrong with that program, and I’m not the only one who sees it.

PW: On the question that drives most of the referendum questions that you’re proposing, which is immigration, hasn’t that situation already been changing since Justin Trudeau left town? I assume that you’re having more fruitful conversation with the federal minister on immigration as much as on anything else. Certainly, the national totals are down substantially from what they were in the last full year of Justin Trudeau as Prime Minister.

Smith: The issue has been the same. If you go back to one of the first letters that I wrote to Justin Trudeau, the foundational grievance we have is that we want to have more control over the economic migrants, just like Quebec does in its 1991 Canada-Quebec agreement. In my first letter, I said that we need to have more ability to nominate provincial nominees to become permanent residents.

It just makes sense that if somebody comes here temporarily, and they’re a good fit, they have supported the community, and then they want to move on to permanent migration. Well, we don’t have a permanent status, we don’t have the ability to do that. We’re sort of begging Ottawa to do that. I’ve been asking for 20,000 nominees almost from the beginning, and instead of increasing, they decreased us. They took us down to 4,800. We asked again, and they said, okay, well, they’ll increase it to 6,400, and it hasn’t changed this year. The foundational grievance that I’ve had, which is, we need to prioritize economic migrants, and you need to give Alberta the same control Quebec has in making sure that those who are arriving in our province are a match for the jobs that are here, and they still continue to ignore that. So that’s why it continues to be the top priority that we’ve got to address.

The other part of it is that we have to get an agreement on a level of asylum seekers that our country can actually support. When we have stories of CBSA officers letting somebody through as a refugee, and their idea is to get them in an Uber and send them to the homeless shelter downtown, or our navigation center, that’s not appropriate. That is not the federal government living up to its commitment to provide a safe environment for somebody who’s fleeing a war-torn country. The federal government has to meet their commitments and not be downloading these costs onto the provinces.

They need to right-size the program so we have the necessary level of support, and they need to clean up their approval process so that somebody isn’t waiting years and years and years to determine if they should be here legitimately or not. That is still a huge area that the federal government has not managed properly. I think international students is an area they’re getting a handle on. Temporary foreign workers, we’ve been working with them collaboratively on that to reduce the number, especially in high unemployment zones.

But we have to get back to prioritizing economic migrants as the number one newcomer that comes into our country. And that’s not just me saying that, either. I think you’ll find that Quebec has been saying that same thing for a very long time.

PW: One of your questions asked whether voters support a reasonable fee to be levied on new residents of Alberta for health care. What’s a reasonable fee?

Smith: Well, for example, if you want to go to Australia as a foreign worker, I believe that if you’re single, you pay about $100 a month, so it’s about $1,200 for insurance premiums. I think it might be a little bit less in some other countries, maybe a little bit more. If it’s a family, of course, it becomes a little bit more substantial. Maybe you’re talking about $250 a month. That’s an expectation if a Canadian is to go and work for a year in Australia, they’re expected to get their own insurance, and they’re not expected to bring children along with them to be educated at the expense of Australian taxpayers either. So that’s the kind of thing that we’re looking at.

When it comes to education, we already have this for foreign students in universities. They actually pay more than a Canadian student would. So there’s a principle that we’ve already applied on international students at the university level, what would it be in K-12 education? It costs us $13,284 to educate somebody in our public school system. Our private school system, it costs us about $8,000, and homeschooling, it costs us about $800. So, I think that they can choose their price point. If they want the full public education, maybe it’s the full cost. If they want private school, then they’ll know what that cost would be. And if they want to homeschool, then it’s much more affordable. Or maybe if they’re here just as guest workers temporarily, maybe they wait until they’ve made a commitment to be a permanent resident before they bring their families over, as opposed to imposing an additional cost on taxpayers.

Part of the reason we bring in temporary workers is because we cannot find the workers to be able to fill those positions. We don’t have a sales tax and a provincial income tax is actually a very small portion of revenue that is generated. If you’ve got somebody who is a $60,000 a year worker, they might only pay $4,000 in personal income tax. And if they’ve got two kids, that’s already $26,000 in cost on our system. And then if all the family needs to have healthcare, that’s another $20,000 in cost. That’s not a great value proposition, and if other countries in the world have come to the conclusion that guest workers have a different status than those who’ve made a commitment to become a permanent taxpayer, then I don’t think it’s unusual for us to be thinking along the same lines.

PW: That’s a lot to keep in mind as one votes on question 5 or 6 on the referendum, which is, do I support a reasonable fee? Will the government define what that fee would be before people are asked to vote on it?

Smith: I think that we want to see in principle if people are supportive of the concept, and then I guess we would do some more consultation after the fact. But people would need to know what our cost is to be able to provide that level of support.

PW: If people vote Yes to leave Canada in October, and they also vote Yes in the majority to 6 or 7 processes that involve provincial legislation and interprovincial negotiation… so, if they vote yes to all of your questions, plus yes to the big scary question, does that imply that they have voted to continue Alberta functioning as a province for the foreseeable future? I mean, how do you arbitrate between a question on leaving the country, and a bunch of questions that assume staying in the country?

Smith: Well, there’s a lot of ifs there. As I’ve said, I’m doing my part to work collaboratively and constructively with the new Prime Minister to give Albertans hope again that the country can work. That’s why we signed the MOU, and it’s why we’re working on implementing it. It’s also why I put immigration on the questions, because I think that’s another area of pressure. There are other issues, too. The gun grab is a huge issue that is driving the signature campaign as well, which I think the Prime Minister should back down on. No one wants it, except Quebec. If Quebec wants it implemented there, but no other province wants it, no other chiefs of police want it, it’s just causing a lot of tension and hardship to be turning these law-abiding citizens into criminals.

My hope is that we can identify the issues that are causing problems and then see if those numbers [of Albertans wanting to separate] go down. As I mentioned, after the Liberals got elected again, it was up as high as 42%, which was very alarming to me. Most recent polls have it down to 32%, which is still high.

I want to see if we can address some of those underlying issues to get those numbers lower, because I do want people to feel confident that Canada can work. And if we work the way we intended, which is as a defederated state, where you have more powers at the provincial level, and are not interfered with by the federal level, then I think not only would that satisfy Albertans, I think it would satisfy Quebecers, too. I’m going to do my part to try to address some of those issues.

But to your question, when I look at those numbers, I just don’t think that [the question of separation] would be successful. I think people would be willing to continue to tell us to work on Canada, to work on the relationship, and so I would anticipate that the 9 questions that we’re putting forward would give us some guidance about how we would be able to continue working on that. But we’ll see on May 6th whether the signatures have been gathered, and we can talk more about it after that.