Alberta Separation Report Highlights Divergent Long-Term Scenarios

A University of Calgary School of Public Policy report models two possible scenarios for Alberta's economy after separation from Canada. The report, commissioned by the Alberta government ahead of the Oct. 19 referendum, estimates that in the short term, Alberta's real gross domestic product would be 2.2% lower than if it remained in Canada under a 'smooth' scenario. However, over the long term, GDP is estimated to be 3.4% higher.

Under a 'difficult' scenario, GDP would be 10.1% lower in the short term and 16.2% lower over the long term. The report emphasizes that these scenarios are not predictions but rather possible outcomes based on different assumptions about trade, borrowing costs, and Alberta's energy sector.

The smooth case assumes improved productivity in Alberta's resource sector and higher oil prices, while the difficult scenario assumes persistently higher borrowing costs, a larger discount on Alberta oil, and higher costs for government services. The report also examines policy changes and potential savings that could follow separation under some assumptions.