Alberta is a pariah province, its fossil-fuel economy an impediment to the Great Reset Prime Minister Justin Trudeau envisions for Canada, its oilsands the epitome of evil to those on the left. Alberta is even an embarrassment to the federal Conservatives under Erin O’Toole, whose embrace of the Paris Climate Agreement represents but one example of his attempt to distance himself from the “deniers” who populate the province.
President Joe Biden’s cancellation of the Keystone XL pipeline on day one of his presidency—the latest of the never-ending blows the province and its people have endured—dashed all hope for a robust Alberta recovery. With provinces to the east and west also blocking pipelines along with the inter-provincial free trade Albertans would like to see, landlocked Alberta is a prisoner within Canada, and it will stay landlocked as long as it remains in Canada.
But if Alberta leaves Canada it will be landlocked no more, in law and in practice.
An independent Alberta would strand British Columbia, cutting it off from the markets east of Alberta on which it and those markets depend—the Port of Vancouver, which is as large as Canada’s five next-largest ports combined, alone accounts for $240 billion in goods that Canada trades with 170 countries. Goods or people wanting to travel between B.C. and the rest of the country, whether by land or air, would need a sovereign Alberta’s permission if they wanted to avoid detours through the United States. Faced with this existential threat, the Rest of Canada would immediately buckle and enter into negotiations with Alberta, the more so since the Canadian dollar would be crashing—Alberta’s oil is the single biggest contributor to Canada’s foreign exchange.
Alberta Premier Jason Kenney takes a federalist stance, pooh poohing the leverage that a sovereign Alberta would wield by saying Alberta separatism would meet the same fate as Quebec’s when it tried to separate in 1976. “There was an enormous exodus of people, of business, of jobs, of capital. Real estate values declined by over one-third in the province of Quebec,” he argued, dismissing Alberta separatism as “an empty threat.”
Kenney’s analysis is facile. The exodus from Quebec came overwhelmingly from Anglophones who believed—with good reason—that Quebec’s fiery nationalistic, anti-business, social-democratic government would compromise their civil rights and threaten their livelihoods. No one would flee an independent Alberta for fear of either cultural assimilation or socialism. Neither would capital panic, since no one would fear that an independent capitalist Alberta would enact capital controls or embark on expropriation of private property.
While Alberta might take an immediate hit at the prospect of its departure from Canada, it also might not. Its oil earnings are largely in U.S. dollars, insulating it from a decline in the value of the Canadian dollar and allowing Albertans to purchase Canadian goods and services more easily. Alberta, the Republic, would likely end the current capital shortage in Alberta, the Pariah, since investors would wake to a country shorn of Canada’s high federal tax rates. If a free-market Alberta opened its doors to Canadians fearing a woke culture in Trudeau’s Canada, the exodus Kenney warns about could instead be an influx.
Albertans wouldn’t need to play their winning hand once they held the cards in their hand. A chastened Rest of Canada, blanching at the realization that Alberta’s departure would kill its economy, would give Alberta the Fair Deal in a renewed Confederation that it has been demanding, Alberta oil would flow to tidewater, and the contempt the Rest of Canada once reserved for Albertans would morph into grudging respect.
