A new independent report suggests it would cost Alberta between $50 billion to $170 billion to separate from Canada. The report was released by the University of Calgary’s school of public policy on Wednesday morning. It looked at two different separation scenarios: a “smooth” scenario, in which negotiations with Canada are “quick and favourable” to Alberta, and a “difficult” scenario in which negotiations are long and unfavourable to Alberta. It found the “short-term term impacts of potential separation would result in significant economic disruption and costs for Albertans,” even if separation negotiations went well. “The cost of establishing a new country could range from $50 billion to $170 billion in the first five years following separation,” a media release on the report read. “These costs are in addition to impacts on economic growth and Alberta’s fiscal position.” It found, while Alberta could save money on equalization payments, the province would take on “major spending,” including: The report considered the costs of providing programs currently under federal jurisdiction, as well as monetary policy, negotiations around Canadian debt and assets, labour mobility and international trade relationships. The ‘smooth’ scenario The report found the “smooth” scenario could see Alberta maintain access to major trade markets, improve delivery of some government services, and expand resource development. Long-term, the report suggests separation could benefit Alberta in higher gross domestic product, and lower taxes and a modest increase of about $1,851 in Albertans’ wages. However, it said it would take decades to see those benefits, and Albertans would still see negative short-term financial and economic impacts. “Any potential economic recovery could take many years following the disruption of separation and would depend on very specific conditions, including sustained high oil prices, that could not be guaranteed through negotiations,” it said. That transition, the report explains, could take several years due to complex negotiations over pipelines, borders, assets, debts and Indigenous rights; and, if legal battles arise, it could drag on even longer. The ‘difficult’ scenario The report said a “hostile” reaction from Canada would prolong the separation process and could eliminate some long-term benefits. Its “difficult” scenario shows separation could spur “lasting economic and fiscal challenges for both Alberta and Canada.” That would be seen in long-term reduction in GDP, higher unemployment and taxes, and the loss of almost $12,000 in income for Albertans. “Even after 20 years, employment could be nearly five per cent lower and Alberta’s economy more than 16 per cent smaller than if the province remained in Canada,” the report read. “Despite higher taxes, the government could face an ongoing annual budget deficit of more than $30 billion,” the report found. “Despite higher taxes, the government could face an ongoing annual budget deficit of more than $30 billion,” the report found. Minister of Finance Jason Nixon responded to the report in a media release, encouraging Albertans to read the report ahead of the Oct. 19 referendum. “Both the scenarios outlined in the report highlight how costly it would be for Alberta to separate from Canada in the short term and also highlight the substantial amount of uncertainty Alberta would face in the long term,” Nixon said. “Alberta’s government has always been clear: we support a strong and sovereign Alberta within a united Canada, and that is what we will continue fighting for each day.” ‘A momentous decision’ The University of Calgary said the independent report was commissioned by the Government of Alberta to “inform and support public discussion.” “No amount of analysis can easily predict what the impact of Alberta separation might be,” the report said. “What we can say is that this would be a momentous decision. “There is certainly a scenario where Alberta’s economy and finances could be better after separation, once a transition period is over. However, there is also a scenario where Alberta’s economy could be weaker and its finances much worse, not just immediately but for many years to come.” The Government of Alberta appointed an advisory panel of five experts, to look at the impacts of separation. The panel agreed separation would involve “significant short-term costs” and “highly uncertain” long-term economic and fiscal effects, but added Canada would also suffer as a result. The report found negative impacts to Canada from Alberta’s separation could include: The full report can be found on the Government of Alberta website.
