Alberta separation could cost $130 billion over the next decade

Despite the risks, the Alberta government refuses to assess the economic fallout of leaving Canada

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Alberta separation could cost the province $130 billion in lost economic activity over the next decade.

This is the conclusion I reached by extrapolating a 10-year estimate from an analysis conducted by Dr. Trevor Tombe, director of fiscal and economic policy at the University of Calgary’s School of Public Policy. The idea of Alberta separation—a proposal advanced by some political groups and activists advocating full independence from Canada—has re-emerged as a serious topic of debate in recent years.

Tombe’s analysis estimates that a five per cent increase in the cost of bringing goods into or out of Alberta would shrink the province’s economy by roughly four per cent in 2026. That would represent about $20 billion in annual lost economic activity and income for Albertans, based on the provincial economy reaching nearly $500 billion in gross domestic product (GDP) that year. Nominal GDP refers to gross domestic product measured in current dollars, unadjusted for inflation.

I have extended that estimate over a 10-year period (2027–2036) and adjusted the figures for inflation, using 2017 dollars. The total estimated loss in economic activity to Alberta over that time is $130.2 billion.

A shock of that size would ripple through the broader economy and strain the province’s finances, just as Alberta faces renewed volatility in oil prices, a narrow and unpredictable revenue base and an already stretched budget.

The government has said a provincial referendum on separation could be held in 2026 if enough signatures are collected in support, under the terms of the Citizen Initiative Act, which allows residents to trigger a binding vote on specific public policy proposals.

Yet despite the public momentum, neither the Alberta Treasury Board and Finance nor the Executive Council, Intergovernmental and International Relations, appear to have done any real analysis of what separation would cost, even as a risk-planning exercise.

The Smith government’s explanation that “the civil service does not provide analysis on hypothetical scenarios or forecast on policy” is puzzling. Alberta has regularly forecasted the potential impacts of federal proposals such as the oil and gas emissions cap and the Clean Electricity Regulation. If separation is on the table, it deserves the same level of review.

The province has made clear its frustrations with federal policy in recent years, from environmental regulations to equalization. These grievances, whether justified or not, are driving more Albertans to consider alternatives. But public frustration is not a substitute for due diligence. Before asking citizens to weigh in on an issue as complex as leaving Confederation, the government has a duty to measure the economic consequences and communicate them clearly.

Alberta So not be the first province to debate its future within Canada. Quebec has held two referendums on sovereignty. But even in those heated moments, Quebec governments commissioned substantial analysis and presented the public with detailed assessments. Albertans deserve no less.

Part of any government’s role is to inform its citizens about the likely costs and consequences of serious policy choices. The Alberta Prosperity Project, a non-profit group promoting independence, has released what it considers a fully costed plan for an independent Alberta. Shouldn’t the provincial government help Albertans by testing that plan and showing whether it adds up?

Don’t Albertans—whether they support or oppose separation—deserve clear, objective information about the economic and financial consequences before they’re asked to vote?

Even if some continue to debate the merits of separation, one thing shouldn’t be up for debate: the Alberta government has a duty to provide accurate, transparent analysis. At the very least, Albertans deserve honest numbers before being asked to vote on their future.

Lennie Kaplan is a former senior manager in the fiscal and economic policy division of Alberta’s Ministry of Treasury Board and Finance, where, among other duties, he examined best practices in fiscal frameworks, program reviews and savings strategies for non-renewable resource revenues. In 2012, he won a Corporate Values Award in TB&F for his work on Alberta’s fiscal framework review. In 2019, Mr. Kaplan served as executive director to the MacKinnon Panel on Alberta’s finances—a government-appointed panel tasked with reviewing Alberta’s spending and recommending reforms.