An Alberta-based group that became a target for Premier Jason Kenney in last year’s provincial election is threatening legal action over a public inquiry into the funding of environmentalists.

A lawyer for Progress Alberta, an Edmonton-based non-profit that has been a vocal critic of Mr. Kenney’s United Conservative Party government, sent a letter last week to the inquiry’s commissioner arguing that the process violates the Charter of Rights and Freedoms.

The letter demands that the inquiry be shut down or the group will file a legal challenge. It would be the second court case related to the inquiry, after Vancouver-based environmental group Ecojustice filed its own challenge late last year.

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Executive director Duncan Kinney said the Premier’s decision to single out Progress Alberta is retaliation for the group’s criticism of the UCP. Progress Alberta publishes material online, distributes a podcast and organizes support for the provincial New Democrats and left-leaning policies.

“Jason Kenney is essentially using the resources of the provincial government to go after his political enemies under the cover of this anti-democratic inquiry,” Mr. Kinney said.

"It's a paranoid government that needs to create enemies to justify its own brutal austerity that's already dramatically affecting Albertans.”

The province launched the public inquiry last year as part of a strategy to fight back against the perceived enemies of the province and its petroleum industry. The inquiry is led by Steve Allan, a forensic accountant who has the power to compel testimony and evidence.

His mandate is to examine how environmental groups have used funding from U.S. foundations to campaign against the oil and gas industry. Many of those groups have noted that American funding accounts for only a small portion of their overall budgets.

The province has pointed to tax filings from the U.S.-based Tides Foundation that shows it gave tens of thousands of dollars to Progress Alberta in 2016 and 2017. Mr. Kinney said the group also receives money from Canadian labour unions and individual supporters.

The Progress Alberta letter, from lawyer and University of Ottawa law professor Amir Attaran, argues that the inquiry violates Charter sections guaranteeing freedom of expression and freedom of association.

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Prof. Attaran wrote that the inquiry’s mandate to investigate “anti-Alberta energy campaigns” has a chilling effect on constitutionally protected speech and Canadians’ right to free association.

He said he hopes the province and Mr. Allan heed the group’s constitutional concerns as they decide in the coming weeks about whether to proceed with the second phase of the inquiry, which would include public hearings. Until now, the inquiry’s work has largely focused on examining documents, such as tax records.

“They should be given an opportunity to correct what are clearly Charter violations,” Prof. Attaran said in an interview. “I want to believe Alberta will abide by the Constitution in good faith.

The Ecojustice case is set to be heard in April.

In an e-mailed statement, Mr. Allan confirmed that he received the Progress Alberta letter, although he said it would be inappropriate to comment on legal issues.

The inquiry has a budget of $2.5-million. An interim report is due at the end of the month and its final report is set to be finished by July.

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Mr. Allan’s statement said he remains on schedule to issue his interim report.

Justice Minister Doug Schweitzer was not available for an interview. His press secretary, Jonah Mozeson, deferred questions about the Progress Alberta letter to Mr. Allan but defended the inquiry, which was a significant campaign promise from last year’s provincial election campaign.

“It is ridiculous to suggest that transparency hinders freedom of expression and/or association,” Mr. Mozeson wrote.

Mr. Allan has revealed little about his work so far. The inquiry’s website indicates that he planned to travel to Vancouver and other parts of B.C., Washington and Toronto last fall.

Mr. Allan faced criticism last November after public records showed that he awarded a sole-source contract to his son’s law firm. At the time, Mr. Allan said Dentons Canada LLP is a law firm that he has worked with in the past and that his son had no role in the contract.