Author: Lee Harding
Alberta independence has clear merits its advocates put forward and clear downsides its opponents cite. What has been much less discussed is the potential for helpful governmental and economic reforms for the rest of Canada. If free trade occurred between an independent Alberta and the remaining Canadian provinces, Canada might do more in its component parts than it would together.
Alberta’s healthy oil and natural gas reserves explain only part of the province’s success.
Despite some periods of drift, the province has a long history of fiscal prudence, keeping both taxes and deficits low. The result is an economic juggernaut that funds the rest of Canada.
Numerous analyses have established that the province’s contributions to the Canada Pension Plan, Employment Insurance premiums, business tax revenues, personal tax revenues, and its equalization payment giveaways are enormous.
The Fraser Institute found Alberta’s $244.6 billion net contribution to Confederation from 2007 to 2022 averaged $15.3 billion per year.
A 2026 Library of Parliament report based on Statistics Canada data found that Alberta’s per-capita contribution was almost $4,000 per year. British Columbia’s was roughly $1,000, and all eight other provinces were net takers.
This explains why some Albertans want to leave the mooch-land called Canada, and part of why the rest of the country wants them to stay. Alberta’s departure would leave a massive fiscal hole in national finances. The silver lining is that it would also create a crisis big enough to justify necessary reforms to Canada otherwise too politically difficult to see through.
The absence of Alberta money would force fiscal and policy reforms at all levels of government in Canada.
The result would look much like it did when Finance Minister Paul Martin reduced spending to restore balanced budgets in the mid-1990s. A comprehensive review of spending led to sensible reductions. This included lower transfers to the provinces, which in turn meant less provincial help for municipalities. Smarter and lower program spending ensued everywhere.
Health care and education are always major expenditures. Their state of mediocrity bordering on crisis is partly because normal market forces don’t apply to them. Though they ostensibly exist for the public, in practice they exist for the public sector unions that always want more money and vehemently oppose accountability for the results. Fiscal pressures would force changes to the Canada Health Act, giving provinces the freedom to harness the private sector to drive reform. This would usher efficiencies in service delivery like nothing else could.
Parallel changes in education, such as school voucher programs, could buy more efficiencies and similar space for the provinces. Federally, Ottawa would have to back off its aggressive attempts to put every Canadian child in a government-funded daycare. That’s a good thing.
Seniors’ benefits would also get a retool. In recent years, the Generation Squeeze campaign has rightly complained that OAS benefits are going to rich seniors who don’t need it. Alberta’s departure would make that change. Another welcome possibility would be the elimination of unsustainable defined-benefit pension plans still common among government workers and the public sector.
Disproportionate expenditures on Indigenous reserves would be increasingly hard to bear, forcing reforms. Reserves are usually economic failures, as Canada’s best example of domestic Marxism. No one owns the land, so there is no capital development. Mandate that each reserve issue 99-year certificates of possession to land for every band member, and the tools of capitalism can start to unleash wealth and decrease reliance.
An Alberta-free Canada would probably abandon its pursuit of net zero for a few years to address more immediate challenges. Policy changes at the provincial and federal level would take the shackles off the economy, pipeline development, and oil and gas exploration. Quebec’s ban on petroleum production and exploration and the fracking bans in Nova Scotia and New Brunswick would vanish.
Canada’s land connection with British Columbia across the North would become vital. That would spur more northern corridors for transportation and commerce and more export capacity out of Hudson Bay. This is long overdue.
Some recent studies by economist Trevor Tombe as well as the University of Calgary’s School of Public Policy have suggested trade barriers around an independent Alberta would slow its economic development. That is a possibility that should not be ignored.
Still, both a problem and a promise remain: after a short adjustment period, the combined wealth and prosperity of an independent Alberta and Canada’s legacy provinces could well be higher than before. They would be forced to adopt the Alberta way: economic development and responsible taxation and spending.
Canada has plenty of room for improvement, and any government with the guts and vision to implement them could make those improvements without Alberta’s departure. Unfortunately, it might take the threat or the reality of Alberta independence to make them happen.
Lee Harding is a research fellow at the Frontier Centre for Public Policy. He holds a Master’s of Public Policy (U of C) and a BA in Journalism, with a career spanning major networks like CBC and Global TV, as well as landmark published research on Canadian economic and social policy.