apotterdd / Depositphotos.com
EDMONTON — An independent report commissioned by the Alberta government says separating from Canada could cost the province between $50 billion and $170 billion in the first five years, depending on how negotiations unfold.
The University of Calgary’s School of Public Policy examined two hypothetical scenarios ahead of Alberta’s Oct. 19 referendum: one involving relatively quick and favourable negotiations with Canada, and another involving prolonged and unfavourable negotiations.
The report concludes both scenarios would bring significant short-term economic disruption and costs.
Alberta Finance Minister Jason Nixon says the report reinforces the government’s position that separation would be costly in the short term and leave the province facing substantial long-term uncertainty.
“The panel’s assessment emphasizes that 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.
He says the government continues to support what it describes as a strong and sovereign Alberta within a united Canada.
Under the more difficult scenario, the report says limits on trade and market access could leave employment nearly five per cent lower and Alberta’s economy more than 16 per cent smaller after 20 years than if the province remained in Canada.
It also projects the Alberta government could face an annual budget deficit of more than $30 billion, despite higher taxes.
The smoother scenario assumes Alberta maintains access to major trade markets, expands resource development and delivers some government services more efficiently.
Even under those conditions, the report cautions economic recovery could take years and would depend on factors including sustained high oil prices.
The analysis also considers the costs of taking over programs currently under federal jurisdiction, monetary policy, negotiations over Canadian debt and assets, labour mobility and international trade relationships.
Martha Hall Findlay, director of the School of Public Policy, says the school was given full academic independence in preparing the report.
“It has been a great opportunity for the school to help inform Albertans on such a critical issue,” Hall Findlay said.
An independent advisory panel chaired by economist Jack Mintz also reviewed the report.
The panel agreed separation would carry significant short-term costs while longer-term economic and fiscal effects remain uncertain.
“The panel concurs that separation results in short run economic costs for Alberta for uncertain net benefits in the longer run,” Mintz said.
The panel also concluded Alberta’s departure would have economic consequences beyond the province and would negatively affect Canada.
Nixon thanked both the School of Public Policy and the advisory panel and encouraged Albertans to review the findings before voting.
The report was released as Albertans prepare to vote Oct. 19 on whether Alberta should remain a province of Canada or whether the provincial government should begin the legal process required under the Canadian Constitution to hold a binding referendum on separation.
The full report and advisory panel assessment are available through the Alberta government.
Comments