February 28, 2025
Welcome to the first week of the 2025 winter/spring sitting of the Alberta Legislature—it’s a wild one! This week, allegations of government interference in procurement, incoming tariffs on Canadian exports to America and provincial finances dominated discussion and debate in the house, setting the stage for what could be one of the most fiery and dramatic legislative sessions in recent memory.
What We're Watching
Bidding for Trouble: AHS Procurement Allegations
On February 12, the former CEO of AHS, Athana Mentzelopoulos, filed a $1.7-million wrongful dismissal lawsuit against AHS and the province following her sudden termination as CEO. AHS had been in the process of evaluating contracts that would enable private health care companies to conduct government-funded surgeries such as hip and knee replacements as part of the Surgical Wait-Times Initiative. Mentzelopoulos claims her dismissal is a result of an investigation into these contracts, which she alleges were overpriced and influenced by members of the government or their staff.
Government officials have strenuously denied Mentzelopoulos’ allegations, with Health Minister Adriana LaGrange and Premier Danielle Smith reaffirming there was no wrongdoing in a February 19 press conference. The Government of Alberta has subsequently maintained that AHS handles all procurement processes with no political involvement, and that the real source of the issue is AHS’ opposition to the government’s health care system overhaul. ?
As an official audit continues by the Auditor General on this matter, Premier Smith has moved to hire an independent third party to conduct an additional external audit of the procurement process. The NDP were quick to criticize this approach in Question Period, saying a third party may not provide sufficient transparency, and instead continue to advocate for a public inquiry into the allegations. Still without a seat in the Legislature, NDP leader Naheed Nenshi has been doubling down on X for the need for a public inquiry.
Adding fuel to the fire, now-former Minister of Infrastructure Peter Guthrie resigned on Wednesday, stating in an interview following his resignation that “I could not sit at that table and look these guys in the eye.” Martin Long, MLA for West Yellowhead, has subsequently been named as Minister of Infrastructure. ?
Why This Matters
With everything else going on in the world right now, the absolute last thing this government wants to be dealing with is internal fires. Tariffs are apparently returning on Tuesday, and the government will be thankful for an opportunity to try and change the channel; however, these types of allegations can be tricky to handle and the ongoing Auditor General investigation as well as the media’s continued digging means that the drip-drip may continue for weeks if not months.
Alberta’s history shows that governments caught up in scandals can quickly see public opinion turn against them; but sunlight is often the best disinfectant and between the Auditor General’s report and the third-party inquiry it should become clear if this is a case of a bureaucracy that is resistant and unwilling to change like the government says, or if there are larger issues at play.
Go Deeper
This CTV article discusses the Premier’s response when questioned about private surgical facilities costing more than public ones.
Trouble in Tariff Town: President Trump's Trade Threats Loom Large
On February 27, President Donald Trump announced via Truth Social, that the 10-25 per cent tariffs on Canadian goods scheduled to be implemented on March 4 will go ahead as planned. Trump continues to cite fentanyl entering the U.S. from Canada as the principal driver for tariffs; however, with only 19.5kgs of fentanyl seized at the U.S.-Canada border in 2024, compared to the 9,500kgs at the U.S.-Mexican border, this rationale continues to be tenuous at best.
Many feel fentanyl is only a means to an end, providing the legal cover Trump requires to impose tariffs through executive orders. It’s more likely that the President’s ongoing grievances over the U.S.-Canada trade deficit, Canadian supply management practices and protecting U.S. domestic industries are the true driving force for tariffs.
How to best protect provincial economies remains a dominant topic in the news. In Alberta, Premier Smith has continued to focus on diplomatic efforts highlighting the importance of Alberta’s energy exports for the U.S. and tackling American concerns on border security head-on. With tariffs set to be imposed next week, Alberta continues to favour engagement over rhetoric, with the government—at least publicly—appearing reticent to use the hardnose retaliatory tactics implemented in other provinces to push back on U.S. trade barriers. Should tariffs come to fruition on March 4, it will be interesting to see how Premier Smith balances a “Team Canada” approach with fighting for what’s in the best interest of Albertans. ?
Why This Matters
In Alberta, the effects of U.S. tariffs would be particularly acute. Provincial exports to the U.S. have averaged nearly $75 billion over the past 5 years, and with a provincial economy heavily dependent on energy exports to American markets, a 10 per cent tariff on oil and gas exports would drive up costs, threaten production levels, and risk jobs in Alberta’s most critical economic sector.
The economic impact of tariffs is further exacerbated by the uncertainty surrounding their implementation. President Trump’s shifting stance on tariffs—sometimes changing by the minute—adds to the instability. As Canadian governments at all levels enter budget season without a clear forecast, some are choosing to draft multiple budget scenarios to account for this uncertainty. While Alberta has instead persevered with a single budget scenario based on “moderate trade conflicts and retaliatory measures,” the exact impact of U.S. tariffs could still be argued to be anyone’s best guess.
Go Deeper?
This article from The Globe and Mail discusses President Trump’s recent statements regarding Canadian and Mexican tariffs.
Another Edmonton Team Over the Salary Cap: Alberta's Budget Deficit
Yesterday, Minister of Finance Nate Horner unveiled Budget 2025. Entitled “Meeting the Challenge,” the budget plans for $79.3 billion worth of expenditures, leading to a substantial deficit of $5.2 billion, as the government readies itself to address the threat of U.S. tariffs, rapid population growth and ongoing public sector labour negotiations. However, the budget wasn’t all bad news. Despite the deficit, the UCP government has kept their promise to cut taxes, delivering the eight per cent personal income tax bracket for income up to $60,000.
As the government readies itself for choppy economic waters, almost every department has seen an increase in their operating budgets, and spending on new capital projects has increased by more than $1 billion. ?
Why This Matters
Budget 2025 marks Alberta’s first deficit since 2020–2021. While some may have anticipated a deficit given the economic headwinds, others may find it unexpected—especially following consecutive surpluses of $5.8 billion in 2024 and $4.3 billion in 2023.
Continued investment is certainly needed to ensure Alberta is prepared to address whatever economic realities it may face over the coming year; however, the extent of this spending is likely to be the subject of debate over the coming weeks. For example, Budget 2025 has doubled the government’s expense contingency to $4 billion, ensuring compliance with its own fiscal rules that cap in-year spending to the voted contingency.
Some will argue that this move reflects a UCP government taking an overly bearish stance on the global economy, potentially putting Alberta’s balance sheet at risk. Others will view it as a pragmatic approach to safeguarding the province’s economy against uncertainty.
Go Deeper?
Click here for Navigator’s analysis of Budget 2025.
Question Period - Top Issues?
On the Order Paper
Government Bills and Orders
Second Reading
Bill 37 – Mental Health Services Protection Amendment Act, 2025
Bill 38 – Red Tape Reduction Statutes Amendment Act, 2025
Public Bills and Orders Other Than Government Bills and Orders
Second Reading
Bill 208 - Psycho-Educational Assessment Access Act
Bill 209 - Reconciliation Implementation Act
Bill 210 – Employment Standards (Protecting Workers’ Tips) Amendment Act
Bill 211 - Arts and Creative Economy Advisory Council Act
Bill 212 - Organ and Tissue Donor Information Agreement Act
Bill 213 – Cancer Care Delivery Standards Acts
Bill 214 - Eastern Slopes Protection Act
Bill 215 - Prohibiting Ownership of Agricultural Lands (Pension Plans and Trust Corporations) Act
Committee of the Whole
Bill 206 - Child and Youth Advocate (Parent and Guardian Advisor) Amendment Act
Bills Awaiting Royal Assent
N/A
Schedule of the Legislature
Next week is break week for the legislature; however, they will resume on March 10. The spring session is expected to sit until May 15, 2025. A full schedule can be found here.??