Alberta Separation Would Devastate Economy, Chamber Warns

As Alberta prepares to vote on a referendum question about separating from Canada, a new study by University of Calgary economist Trevor Tombe estimates that such an event would lead to significant economic fallout. The report found that trade costs would rise by five to eight percent, comparable to the UK's experience after leaving the European Union.

Alberta is considered the most trade-exposed jurisdiction in Canada, with nearly one in three workers employed in sectors vulnerable to disruptions. This could result in job reductions of up to 175,000 and an annual economic hit of up to $62 billion. Additionally, Alberta would face a $9-billion fiscal shortfall if it were to separate.

To close this gap, the study suggests that Alberta would need to implement measures such as introducing a 13 percent sales tax, hiking corporate income tax by 10 percent, or cutting transfers from the federal government by 40 percent. The Chamber of Commerce has joined the 'stay' camp, with president and CEO Deborah Yedlin warning that separation would be like scoring on one's own net.

The vote comes as Alberta stands to benefit from its position in the global energy market, particularly amidst ongoing conflicts in the Middle East and Russia. Some business leaders may have been hesitant to speak out due to employee sensitivities, but Yedlin emphasizes the need for optimism and looking forward in the current environment.