Calgary Chamber Warns Alberta Separation Could Cost Economy $62 Billion Annually, Trigger Business Uncertainty

A new economic report released by the Calgary Chamber of Commerce warns that Alberta separating from Canada could have severe economic consequences, including a potential annual loss of $62 billion to the provincial economy, the disappearance of thousands of jobs, and the relocation of businesses outside the province.

The report has intensified debate over Alberta’s future as discussions surrounding provincial sovereignty continue to gain political attention. While business leaders describe separation as a major economic risk, supporters of Alberta independence argue the report focuses too heavily on potential challenges while overlooking new economic opportunities.

The Calgary Chamber commissioned University of Calgary economist Trevor Tombe to examine the possible economic consequences of Alberta becoming an independent country. Drawing comparisons with the economic impact experienced following the United Kingdom’s departure from the European Union, Tombe concluded that even a modest increase in trade barriers could significantly damage Alberta’s economy.

According to the analysis, an estimated eight percent increase in trade costs could reduce Alberta’s economic output by as much as $62 billion annually and result in the loss of approximately 175,000 jobs. The report suggests that higher trade costs could emerge through new tariffs, increased regulatory differences, customs requirements, or Alberta losing access to Canada’s existing international trade agreements.

Tombe noted that while Brexit provides a useful reference point, Alberta’s situation would likely be even more complicated because creating an entirely new country involves far more extensive political, economic, and legal restructuring than leaving a political union.

The report estimates that roughly 900,000 Albertans, representing nearly one-third of the provincial workforce, are employed in industries heavily dependent on exports beyond Alberta’s borders. These sectors could face considerable uncertainty if trade relationships become more expensive or difficult.

The study also examined Alberta’s economic relationship with the rest of Canada. It estimates that approximately 330,000 Alberta jobs are supported by interprovincial exports. If trade costs with other provinces were to rise by eight percent, Alberta’s economy could contract by an additional $16 billion while losing another 34,000 jobs. Nationally, Alberta’s trade with other provinces is estimated to support around 800,000 jobs across Canada.

The findings come shortly after the Alberta government announced it has commissioned the University of Calgary to conduct its own independent economic assessment of the potential costs and consequences of Alberta separation. That government-funded study, valued at $1.5 million, is expected to be completed later this summer.

Supporters of Alberta independence have challenged the Chamber’s conclusions.

Keith Wilson, constitutional lawyer and separation advocate representing the third-party organization Let Alberta Decide, rejected comparisons between Alberta and Brexit. He argued that the situations are fundamentally different because Britain left its largest trading market, while an independent Alberta would strengthen its economic relationship with its largest trading partner, the United States.

Wilson maintained that Alberta’s vast natural resource industries, including oil, gas, and agriculture, would remain in place regardless of political status. He also argued that Alberta’s highly skilled workforce would continue supporting those industries and suggested fears of widespread business departures are overstated.

The debate over separation has produced widely different financial projections from various organizations.

Premier Danielle Smith has previously estimated that Alberta could face approximately $400 billion in transition costs, including assuming its share of Canada’s national debt, establishing new government institutions, and meeting international obligations such as defence commitments. She has also suggested Alberta could face ongoing annual costs of as much as $50 billion following separation.

Separatist organizations strongly dispute those estimates. The Alberta Prosperity Project has projected transition costs closer to $6 billion and argues that Alberta would ultimately generate budget surpluses by retaining revenues currently transferred to the federal government.

Alongside its economic modelling, the Calgary Chamber of Commerce also surveyed its membership to better understand business sentiment regarding Alberta separation.

The survey was conducted between June 8 and June 22 among approximately 1,600 chamber members, with 137 businesses responding. While the survey does not represent all businesses in Alberta, it provides insight into the concerns of participating companies.

More than three-quarters of respondents said ongoing discussions about Alberta separation are already having a negative impact on the provincial economy.

Approximately two-thirds reported that the uncertainty surrounding separation has negatively affected their own business operations, while just over one-quarter indicated they had experienced no significant impact.

Perhaps most notably, nearly half of participating businesses said they would consider relocating their operations outside Alberta if the province voted to begin the separation process.

Tombe noted that similar patterns were observed during periods of political uncertainty surrounding Quebec sovereignty, when numerous companies relocated their headquarters away from Montreal due to concerns over future economic stability.

He suggested Calgary could face comparable risks because it serves as headquarters for many national and international corporations that carefully evaluate political and regulatory stability when making long-term investment decisions.

Ruhee Ismail-Teja, Vice President of Policy and External Affairs at the Calgary Chamber of Commerce, said the survey was designed to measure concerns already being expressed by the business community regarding the uncertainty surrounding Alberta’s political future.

Wilson, however, argued that the survey reflected anxiety rather than objective economic analysis.

He said Alberta’s resource-based economy cannot simply relocate elsewhere and emphasized that industries such as oil and gas, agriculture, and natural resources would continue operating regardless of constitutional changes. He also expressed confidence that Alberta would remain attractive to skilled workers because of employment opportunities tied to its natural resource sector.

As debate over Alberta’s future continues, economic forecasts remain sharply divided. With the provincial government’s own independent study still underway, both supporters and opponents of separation are expected to closely examine its findings before any future referendum discussions move forward.

Courtesy: CBC