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Two law experts debate the merits of constraining the notwithstanding clause

Commentary

Late last year, Gib van Ert, president of the Canadian Council on International Law and an authority on the application of international law in Canadian courts, and Prof. Amir Attaran of the Faculty of Law, University of Ottawa published a proposal in the Hill Times for a new law that would impose constraints on the use of section 33 of the Charter—the so-called “notwithstanding clause”—based on Canada’s international obligations. Their proposed “Notwithstanding Act” would oblige the federal cabinet to use its power to disallow a federal or provincial law (a power not used since World War II) every time a legislature uses section 33 to pass a law that either the federal cabinet or the Supreme Court of Canada concludes is inconsistent with an international treaty to which Canada is a party. The proposal recently attracted new attention in the wake of Saskatchewan’s decision to invoke section 33 to pass legislation saying that students under 16 must have parental consent to change their names or pronouns at school.

The Hub has invited Mr. van Ert and Howard Anglin, a regular contributor, to debate the merits of the proposed Notwithstanding Act. This debate will take place in two parts. Today, in Part 1, Mr van Ert describes and defends the proposed Act and Mr Anglin responds with an initial critique. Tomorrow, in Part 2, Mr van Ert and Mr Anglin will each offer two brief responses to the other’s arguments.

Introduction by Gib van Ert

On a plain reading of its terms, the notwithstanding clause (section 33 of the Constitution Act, 1982) would allow a provincial legislature to suspend, for five years less a day, the right of Jews (or Muslims or Christians or Sikhs, etc.) to practice their faiths—and to renew that suspension every five years indefinitely. 

Also on a plain reading of section 33, a legislature could suspend for five years less a day the right of free speech. Or the right to liberty. Or the right to equality. Or even the right to life. And maintain those suspensions indefinitely.

There is a view, current in some political and legal circles, that the capacity of section 33 to shelter the most outrageous human rights violations from all judicial oversight is not a bug but a feature. The notwithstanding clause says what it means and means what it says. It is an express provision of our Constitution—indeed, of our Charter—and there is no power reserved to the courts to impose any limits on it. 

There may, however, be a power in Parliament to impose limits on it. In an article Prof. Amir Attaran and I published in the Hill Times last December, we proposed that Parliament enact a law requiring the federal cabinet to review all exercises of section 33—whether provincial or federal—for consistency with Canada’s international legal obligations. Where an invocation of the notwithstanding clause would put Canada in breach of those obligations (as determined, where needed, by reference to the Supreme Court of Canada), our proposed law would require cabinet to disallow that enactment under sections 56 and 90 of the Constitution Act, 1867.  

I suggest there are at least three merits to this idea. 

First, a Notwithstanding Act would impose some level of protection against the worst potential excesses of the notwithstanding clause. For instance, all forms of overtly discriminatory laws—expressly targeting vulnerable religious, racial, or ethnic minorities—would be captured. In the aftermath of the Second World War, the victorious powers denied such discrimination the imprimatur of law in instruments such as the UN Charter, the Universal Declaration of Human Rights, and the International Covenant on Civil and Political Rights. 

Second, a Notwithstanding Act would measure exercises of section 33 against an objective external standard, namely Canada’s obligations under international human rights law. Successive federal governments, Conservative and Liberal, have freely contracted these obligations. They are not the products of judicial creativity, as might be said of the unwritten constitutional principles described by the Supreme Court of Canada in the Secession Reference and other cases. 

Third, scrutinizing exercises of the notwithstanding clause for consistency with our international obligations is in keeping with the constitution’s recognition that the conduct of foreign relations (“External Affairs” in historic Canadian parlance, “Global Affairs” in the idiom of the current government) rests with the federal Crown. Provincial, or even federal, laws that breach Canada’s international obligations are incursions into Canadian foreign policy which—assuming we strive for an intelligible and consistent foreign policy—ought to be discouraged.

Many objections can be made to this idea, and indeed Howard Anglin will make some of them (no doubt forcefully) in his response to this article. I will address only one now. The federal government’s disallowance power has not been exercised in decades. Some commentators have gone so far as to question whether it remains part of our law. Of course it does. It is written into the 1867 Constitution, just as the notwithstanding clause is written into the 1982 Constitution. Both provisions are, in the words of section 52 of the Constitution Act, 1982, part of “the supreme law of Canada”. 

Response by Howard Anglin

I am pleased to have an opportunity to respond to Gib van Ert’s creative scheme to neuter section 33 of the Charter of Rights and Freedoms. Before I get to (some of) my (many) disagreements, let me acknowledge a significant point of agreement: Mr. van Ert’s proposal is viable. I agree that the federal government’s disallowance power—the cabinet’s ability to nullify any provincial law—remains available, despite not being used for 80 years. 

My primary concern is not, therefore, technical; it’s far more serious. Not to put too fine a point on it, but the revival of the disallowance power—not just as a potential political remedy but a legal requirement—would provoke a constitutional crisis. It’s hard to imagine a single act that could do more to inflame smouldering separatist sentiment in Quebec or spark it in Alberta and Saskatchewan. 

One can, of course, believe that some laws are so inhumane, so evil, that disallowing them would justify burning down our constitutional order, but viewed objectively among our peer countries, Canada is not an obvious moral outlaw. In fact, I can’t think of a single current or contemplated law, including those I dislike, that doesn’t have an analogue among one or more of our peer countries who are also signatories to international human rights treaties. I would, therefore, respectfully suggest that committing constitutional arson would be a rather rash and foolish overreaction at this time.

My second objection is that the proposed Act would be unconstitutional in the profound and venerable sense that it’s inconsistent with established and generally accepted political practice (I explain this sense here). Namely, it violates two foundational constitutional settlements: it undermines section 33 of the Charter, which is conditio sine qua non of the 1982 constitutional settlement; and it violates the original terms of confederation, which allocated certain legal powers to the federal government and others to the provinces. 

On this second point, the Supreme Court of Canada has affirmed that just because the federal government has signed a treaty that touches on an area of policy assigned to the provinces doesn’t give them the constitutional authority to meddle with provincial policy. So far so good. But Mr. van Ert knows this, which is why he proposes instead to deploy the nuclear option of disallowance to circumvent the strictures of federalism. The Act attempts to do indirectly what cannot be done directly, and it would blow a hole in the division of powers as large as the folly of the federal cabinet. 

My other objections will have to await the further back and forth, but I will quickly respond to one more of Mr. van Ert’s points and raise another one.

First, he says his Act “would measure exercises of s 33 against an objective external standard, namely Canada’s obligations under international human rights law.” This is wishful thinking. International human rights instruments are written at such a high level of hortatory abstraction that their application to specific Canadian laws would be inherently contestable and thus immediately controversial. Internationally, they have proved susceptible to the same textually untethered interpretation as the Charter, so the proposed involvement of the Supreme Court would unwisely drag the judiciary into intensely politicised federal-provincial disagreements.

Finally, the Act assumes that an advisory opinion on international law should trump democratically-enacted domestic law. This would incur a democratic deficit so large it would hazard political bankruptcy. Requiring the federal cabinet to disallow democratically enacted provincial laws based on the advisory opinion of five ex-lawyers reading the tea leaves of international law would be the end of 200 years of responsible government. It would remove government farther from the people and exacerbate popular disillusionment with politics, courts, and the Constitution.

Heather Exner-Pirot: Why the oilsands’ weaknesses are turning into strengths

Commentary

Few industrial projects have been more maligned than Canada’s oilsands. It has been called tar sands, a carbon bomb, the “dirtiest oil on the planet.” It’s suffered through the shale revolution, the COVID-19 shutdown, and a torrent of ESG (Environmental, Social and Governance) divestment. Its grade of heavy oil has been discounted and shunned.

But despite the challenges, things are coming up roses. In almost every aspect of the sector that has looked weak in the past decade—costs, grade, carbon intensity—the oilsands are coming on strong, and poised to provide unprecedented revenue streams for Canadian public coffers.

Oilsands are known as “unconventional” oil, which is extraction from anything other than traditional, vertical wells. In northern Alberta, the expansive hydrocarbon resources are in bitumen form, a molasses-like consistency too heavy to flow on its own. It takes a lot of capital and energy to turn the oilsands’ oil into a product that can be transported, refined and used by consumers.

For this reason, the oilsands were seen in the early 2010s as an expensive form of oil, with high up-front costs and a high break-even price: up to USD$75/barrel for new oilsands mines. This made it difficult to compete with cheaper American shale, which came online at scale at the same time as the oilsands, to great chagrin in Calgary.

However, global oil prices are recovering from a multi-year bust, and new “in-situ” extraction technologies have greatly reduced oilsands recovery costs. Break-even prices now average less than USD$40/barrel, and BMO Capital Markets assessed in September that the average oilsands producers could cover their capital budgets and base dividends at USD$46/barrel. By contrast the average large U.S. producer requires USD$53.50/barrel. For new shale wells outside of Texas last year, it was $69/barrel.

Another advantage is that oilsands are low-decline, which means they have decades of inventory, or oil available to be extracted. Shale oil sites have declined as high as 50 percent in the first year. While the oilsands reap the benefits of past investments, shale producers need to continuously drill and invest in new production. (But they haven’t been of late: the U.S. oil rig count has fallen 21 percent since December 2022, largely because of new well costs.)

Another challenge for the oilsands has been its grade: “heavy” or dense, and “sour” or high in sulfur. Light, sweet crudes are easier to refine and have historically sold at a premium. The difference can be stark: at its worst in 2018, West Texas Intermediate (WTI) oil sold for USD$57 a barrel, compared to just USD$11 for heavy Western Canada Select (WCS).

But heavy oil has qualities that are desirable, even necessary for some refined products. Whereas light crude is primarily made into fuels, heavy oil is advantageous for plastics, petrochemicals, other fuels, and road surfacing: things we will still need in a post-combustion, net-zero world. Many American refineries are configured to process heavy oil. Because the U.S. produces virtually none itself, they depend on cheap Canadian sources.

Geopolitical factors are also bolstering heavy and sour oil. Recent production cuts by OPEC+, designed to lift global oil prices, have limited supply of medium and heavy sour grades, which matches the kind of oil the Biden Administration released in its big Strategic Petroleum Reserve sell-off last year. This has brought higher prices for heavy, sour oil, more good news for the oilsands.

As for the oilsands’ biggest Achilles heel, its carbon intensity, this is another weakness turning into a strength. The oilsands are geographically concentrated, with a small number of facilities producing large amounts of emissions. This makes them far easier to decarbonize than conventional oil, which needs huge fleets of rigs creating hundreds of emissions sources in order to produce comparable amounts of oil. Seizing the opportunity, the major oilsands producers are working together on one of the biggest carbon capture projects in the world, building a 400-km CO₂ pipeline that could link over 20 CCS facilities with a carbon storage hub in northeast Alberta. Small modular reactors are another option being explored to reduce emissions. It’s not easy or cheap, but it’s possible to reach net zero, which producers plan to do by 2050.

All of this is not just good news for the oilsands, but for Albertans and Canadians as well. In 2022, royalties going into public coffers from oil and gas extraction hit a record $33.8 billion; that’s more than all royalties from 2016-20 combined. The boost comes not just from higher prices but from Alberta’s strategy to charge significantly higher royalties—up to 40 percent—from oilsands facilities whose upfront development costs have been paid off and revenues are exceeding operating expenses.

A large number of facilities have already reached this threshold, and more are added each year. This flexible new paradigm of permanently higher royalties helps governments moderate the budget rollercoaster of volatile oil prices: nine times more at $55/barrel, and four and half times more at $120/barrel. Next year, when the TMX pipeline adds more than half a million barrels a day of capacity from the oilsands to new markets, the value of royalties will also increase, along with corporate taxes.

Of course, the oilsands still face headwinds from Ottawa, none bigger than a proposal to reduce oil and gas emissions by 42 percent (from 2019 levels) by 2030. Although the oil and gas sector has invested heavily in emissions reductions, and greenhouse gas intensity per barrel fell 20 percent between 2009 and 2020, there is no way to meet the new target without cutting production. S&P Global estimates that 1.3 million barrels of daily output will need to be slashed, which would be an existential threat to the sector. Fortunately, the political tide in Canada is turning in such a way that the oilsands could hang on long enough to see friendlier policies.

Finally, the oilsands remain unloved by investors, although the tide has been turning with higher prices. Their enterprise multiple (EV/DACF), a standard valuation formula, is on average 5.8x as of September and was even lower in 2022. This is much lower than the S&P 500, which has averaged between 11 to 16x in the last few years. In Calgary this has been called the Ottawa penalty box: the only logical explanation for their low valuation seems to be the lack of confidence investors associate with the Canadian energy policy landscape. At any rate, oilsands companies are currently free cashflow machines and are rewarding the shareholders they do have with share buybacks.

After nearly a decade on their back foot, the oilsands have reason for optimism. Lots of people still love to hate them, but they’re starting to rack up some wins.