Mont Pelerin by Western Horseback

To understand the politics of Smith and her theory of the state is to unpack the ideological impact of multiple neoliberal schools of thought on her formative years. As a student at the University of Calgary during the cultural heyday of the Calgary School (more on that later) and an intern at the right-wing, Mont Pelerin–affiliated think tank, the Fraser Institute, Smith was exposed to the mid-twentieth century Austrian School of economics. Most notably represented by Friedrich Hayek, the Austrian School was the critical impetus for early neoliberal economic thought. Hayek argued that when markets are left largely unregulated, they generate a “spontaneous order” — a natural, self-correcting balance that he claimed was far more efficient than any system of state-directed planning. Smith has explicitly endorsed this view, praising Hayek’s insistence that centralized economic planning leads to failure.

Smith’s time at the Fraser immersed her in the ideas of Hayek and Joseph Schumpeter. Reflecting on that period in her PragerU interview, she explained:

I often thought about how do you apply these principles to try to transform government. . . . Those ideas have stayed with me and if we can find some ways to make government serve the interests of the public better – certainly smaller, leaner, more effective, more competitive, less costly – then we would be happy to share that with the rest of the world.

Smith’s theory of the state is rooted in an aversion to all central planning, a commitment to individualism, and the bolstering of the free market at the deliberate expense of any substantive role of the state. She often refers to herself as a libertarian, but the label is complicated in her case. She explicitly draws on both Schumpeter’s “creative destruction” and Austrian theories of entrepreneurialism, tying them to her appreciation of Ayn Rand (indeed, an ideological friend of the Ludwig von Mises thread of the Austrian School). Rand, most known for her absolutist celebrations of individuals and elitism, has been a consistent presence in Smith’s political outlook.

Smith’s admiration for Rand surfaces most clearly in her celebration of entrepreneurialism. As she once put it: “What I take from [Rand’s] work is her celebration of entrepreneurship. All of the wealth created in society comes down to the bright spark of someone’s idea of bringing together capital and labour and producing a product people want.”

She also uses Rand to flesh out her own view of the state’s role in society: that it’s only legitimate functions are protecting individuals from foreign and domestic threats through a robust national defense, police, and law courts. Smith’s politics, in this sense, represent an ideological project to “create Alberta’s little bastion of freedom and free enterprise” — a goal she quite literally wears on her sleeve, in the form of a tattoo of the Sumerian symbol for liberty (which is also the logo for the Liberty Fund).

Canada’s Neoliberal Thought Collective

But Smith’s Alberta-tinged libertarianism was not born in a vacuum. She is a product of a specific Canadian neoliberal thought collective — the Calgary School, a homegrown but less influential Mont Pelerin. Emerging in the 1980s and ’90s, as neoliberal thought and policymaking gained traction, the University of Calgary became dominated by a group of academics who were active in both polemic and explicit political organizing.

The most prominent of these was Tom Flanagan, mentor of future Prime Minister Stephen Harper, best known for his scholarship on how best to impose Hayek’s views of spontaneous order and property onto Canada’s indigenous peoples. Rainer Knopff and Ted Morton coauthored The Court Party, an influential right-wing critique of modern courts, inspired by public choice theory, which denounced “judicial activism” and accused left-wing interest groups of undermining democracy by seeking damages against discriminatory policies. Barry Cooper and David Bercuson produced multiple books in a Milton Friedman–esque style, advocating for remaking the Canadian state along neoliberal lines, with polemics against Quebec and minority language rights.

This group were prolific columnists in conservative national newspapers, frequent guests on the CBC and other networks and recognized as intellectual authorities of the Canadian conservative movement. Flanagan held high-ranking roles in both the Reform and Wildrose parties and maintained a close personal and cowriting relationship with Prime Minister Harper for decades. Morton balanced academic life with electoral politics, eventually becoming Alberta’s minister of finance. Together, they were instrumental in mainstreaming ideas from the Austrian School, the Virginia School of Public Choice, and the Chicago School of Milton Friedman.

Smith represents a continuation of these ideas, both directly and indirectly. Flanagan is widely regarded as her mentor: he taught her at the university, recommended her for an internship at the Fraser Institute, and later served as the campaign manager for the Wildrose Party during Smith’s leadership bid for premier in the early 2010s. Both Flanagan and Morton consider her a part of the Calgary School’s intellectual lineage and its extension into right-wing politics.

Her anti-statist views reflect the anti-central planning, anti-bureaucracy, and anti-welfare state politics that have permeated Alberta politics for over sixty years and were amplified across Canada by Calgary School academics. Nowhere is this clearer than in the recent revival of the Alberta separatist movement.

Austerity Through Decentralization

Alongside her self-appointed “representative of Canada” tour in the United States, Smith has pursued a political project anchored in the decades-long goal of Alberta’s neoliberals: restructuring the province through decentralization to create conditions in which neoliberalism could further thrive.

This project is materially grounded in nearly one hundred years of uninterrupted right-wing governance in Alberta. It draws not only on neoliberal thought but also on two structural factors that have shaped the province’s existence. First, Alberta’s place in Canadian politics has long been perceived as peripheral — far less historically central than Quebec and Ontario — and has often been complicated by federal intervention in provincial affairs, especially on issues of economics and taxation. Second, the discovery of massive oil deposits in 1947 transformed Alberta overnight into a resource-rich economy, binding it to the cyclical crises of capitalism. Because resource royalties could fund much of the provincial apparatus, Alberta has maintained comparatively low taxes compared to the rest of Canada, reinforcing a politics of right-populist grievance, Western alienation, and anti-statism.

For the last seventy years, the idea of Alberta sovereignty has been driven by the ideological impulse to curtail the role of the state — both provincially and through federal intervention — by decentralizing power, starving government of progressive tax revenues, and significantly limiting social provisioning programs. Smith’s version of this project builds directly on three influential documents produced by Calgary School academics over the past two decades.

The first was the 2001 “Firewall Letter,”, a manifesto addressed to neoliberal premier Ralph Klein. Primarily drafted by future prime minister Harper and cosigned by Flanagan, Morton, and Knopff, the letter helped legitimize proposals for Alberta to have its own police force, withdraw from the Canada Pension Plan, collect its own income tax, and restrict the Canada Revenue Agency’s access to Alberta taxpayer money. The idea was to build a “firewall” around Alberta that would impose fiscal restraint and protect the province from a “spendthrift” and “hostile” federal government, thereby preventing Ottawa from encroaching further on the neoliberalism order emerging in the province. As Harper wrote at the time:

Once Alberta’s position is secured, only our imagination will limit the prospects for extending the reform agenda that your government undertook eight years ago. To cite only a few examples, lower taxes will unleash the energies of the private sector, easing conditions for Charter Schools will help individual freedom and improve public education. . . .

Manifestos of the New Right

This ideology was not politically viable in Alberta at the time, but it later became part of the blueprint for Harper’s austerity agenda as prime minister from 2006 to 2015. It resurfaced during the inflationary and pandemic crises, when Flanagan and Morton would coedit the 2021 book Moment of Truth, another manifesto for Western separatism. The volume included chapters by Preston Manning — the godfather of modern right-wing Canadian populism — as well as Cooper and Bercuson, specifically on issues related to Western sovereignty.

That same year, Cooper coauthored “The Alberta Strategy: A Strong, Free, and Sovereign Alberta within Canada” for the self-proclaimed libertarian think tank, The Alberta Institute. His coauthors were Rob Anderson, a longtime Smith ally who later would become her executive director of the Office of the Premier, and Derek From, a lawyer affiliated with right-wing think tanks like the Fraser Institute and Canada Constitution Foundation. The strategy served as an in-depth policy manual for implementing the “firewall.” While all three contributed to Smith’s reform politics, “The Alberta Strategy” provided the most concrete blueprint for Alberta sovereignty, outlining how provincial power could be used to entrench neoliberalism and austerity. It advanced a hardline US-style vision of states’ rights, demanding: “absolute discretion to refuse any provincial enforcement of federal legislation or judicial decisions that, in its view, interfere with provincial areas of jurisdiction or constitute an attack on the interests of Albertans.”

Combining her theory of the state — rooted in the minimal government of Rand, the anti–central planning of Hayek and Schumpeter, and the anti-statism of the Calgary School — Smith had long made sovereigntist politics a recurring, if instrumental, theme in her career. She finally had the chance to implement them upon becoming premier in 2022. When Smith passed the Alberta Sovereignty within a United Canada Act — modeled directly on “The Alberta Strategy” — she fused anti-COVID lockdown politics with economic grievances around oil and gas. The legislation empowers provincial entities to refuse enforcement of federal rules deemed harmful to Alberta’s interests. Smith has already suggested that it could be invoked to obstruct federal climate emissions policies, mandatory vaccinations, aspects of government health care and education funding programs, and other federal interventions. Even her predecessor, Jason Kenney — himself a staunch right-wing politician who shared much of Smith’s broader neoliberal and anti-federal outlook — referred to it as a “full frontal attack on the rule of law.”

Smith is currently on a contentious consultation tour across Alberta, promoting the cornerstones of the Free Alberta Strategy, most notably the creation of an Alberta Police Force, while primarily leaving the Canada Pension Plan intact and forming an Alberta Revenue Agency. The latter two proposals are aimed at decentralizing the welfare state and tax collection, enabling the provincial government to shrink or restructure programs within its borders.

Firewall, sovereignty, separatism — whatever the label — the project seeks to build economic, institutional, and jurisdictional conditions necessary for neoliberalism to thrive, and to reshape the state in its image. At the same time, the grievances she mobilizes — resentment of distant elites, hostility to federal authority, and a rhetoric of embattled local sovereignty — find points of contact with the ascendant global New Right, from Trumpist America to European nationalist movements.