In Oil-Rich Canadian Province, a Long-Shot Secession Bid Gains Traction

Article content

Tammy Haney, a 45-year-old realtor, said Canada’s “been leaning on us, and we’ve just been bleeding out, and we’re done. I don’t want to participate in funding the rest of Canada, or Ukraine, or anywhere else.” Her children were wrapped in US flags to show “we need the United States” as a trading partner and to recognize an independent Alberta, she said.

Article content

A newly independent country encircled by Canada and the US would face hard fiscal questions. 

Article content

The Alberta Prosperity Project published a plan envisioning an unshackled, libertarian petro-state. It would eliminate income taxes and projects a one-time cost as low as C$2.8 billion ($2 billion) to establish new borders, policing, pensions, health, defense, courts and diplomatic machinery. The plan sees a net annual gain up to C$47 billion from ending federal tax contributions and says Alberta would more than double oil production by 2045. 

Article content

Those rosy forecasts require “heroic assumptions,” said University of Calgary economics professor Trevor Tombe. Borrowing costs for the province would likely rise, he said, because separation is a new source of risk. Gross domestic product would take a hit with impeded trade to the rest of Canada. 

Article content

Article content

And Canada would have a strong incentive to make Alberta’s separation difficult, Tombe said, to deter other provinces from following suit — just as the European Union did with the UK after Brexit. 

Article content

Some Albertans who want to stay with Canada are pushing back. 

Article content

Thomas Lukaszuk, the province’s former deputy premier, flipped the secession question on its head and organized a petition drive last year asking citizens to vote in favor of staying in Canada, which got more than 400,000 signatures. His petition, however, did not call for a public vote on the issue, and he has asked Alberta’s legislature to hold its own vote affirming the results. There’s a chance lawmakers won’t act on it until after October, so now he’s campaigning against the Prosperity Project’s effort.

Article content

Indigenous groups, meanwhile, have sued the province for permitting the petition drive to proceed. Treaties spelling out their relationship with the federal government were signed years before Alberta joined the confederation in 1905, and they say the province has no right to interfere with them. 

Article content

Still, the risk of secession is sending tremors through Alberta’s business community. Some 28% of Alberta businesses say separation discussions are affecting them, with 92% of those calling the impact negative, according to a February survey commissioned by the Alberta Chambers of Commerce. The uncertainty stopped investors from making an investment decision for a major hydrogen project, Albertan energy company Atco Ltd. told the Canadian Press.

Article content

Article content

“It’ll be on the risk register of every company and every board, and it will be discussed at length,” said Deborah Yedlin, chief executive officer of the Calgary Chamber of Commerce.

Article content

She and others point to the cautionary tale of French-speaking province Quebec, where rising separatist sentiment in the 1970s prompted businesses like Sun Life Financial Inc. to abandon Montreal for Toronto. Quebec voters eventually rejected secession in a 1995 vote, but only by 1%. 

Article content

After that, the Canadian government wrote new legislation and sought a Supreme Court ruling on secession. The court found that any unilateral attempt by a province to break away is illegal under Canadian law. But if an independence referendum resulted in a clear majority in favor, the rest of Canada would have to negotiate over terms of a split, it said.

Article content

Naheed Nenshi, who leads Alberta’s left-leaning New Democratic Party, said Smith risks making the same mistake former UK Prime Minister David Cameron made with Brexit. Cameron called the 2016 referendum on EU membership, campaigned to stay in, and lost. Now his political nemesis, Nigel Farage, is leading in polls. 

Article content

“Once these things are out in the wild, they are hard to control,” Nenshi said.

Article content

—With assistance from Robert Tuttle, Josh Wingrove and Cedric Sam.

Article content