Separating from Canada could cost Albertans up to $170 billion in its first five years and lead to long-term economic disruption, according to an independent study released Sept. 16 ahead of next month’s provincewide referendum.
Read more: Lloydminster highlights heavy oil sector growth at show
The report, commissioned by the Alberta government and written by the University of Calgary’s School of Public Policy, evaluated the financial implications of leaving Confederation under two hypothetical post-referendum scenarios.
Under a “difficult” scenario, marked by protracted, unfavourable negotiations with Ottawa and restricted market access, Alberta’s economy could shrink by more than 16 per cent after two years, while employment could drop by nearly five per cent. The study noted the province could also face an annual budget deficit exceeding $30 billion despite higher taxes.
Even under a “smooth” scenario featuring rapid, favourable negotiations, researchers warned that recovery could take years and depends on volatile factors outside the province’s control, such as high global oil prices.
The report estimated the baseline transition costs of setting up duplicate administrative systems, trade infrastructure and state functions previously handled by the federal government at between $50 billion and $170 billion over five years.
An expert advisory panel chaired by economist Jack Mintz reviewed the findings, concluding that while long-term financial outcomes remain uncertain, immediate economic disruption is guaranteed. The panel added that separation would also inflict substantial financial harm on the broader Canadian economy.
Albertans vote Oct. 19 in a referendum on whether the province should pursue independence from Canada.
Read more: New workshop to help parents navigate youth social media use
