Alberta leaving Canada could cost as much as $170 billion in its first five years, according to a government-commissioned report.
The University of Calgary’s School of Public Policy estimates separation would cost between $50 billion and $170 billion during the five-year transition, depending on how negotiations with Ottawa unfold.
The money would cover new infrastructure, staffing and Alberta’s share of the federal debt.
Separation “involves far more than just drawing new borders and building a new state, picking new politicians and deciding on new policies,” the report says.
“It completely changes how public services, trade, taxes and laws work.”
The Alberta government commissioned the independent analysis in June ahead of Alberta’s October 19 referendum on its future within Canada.
According to a government news release, the report models “smooth” and “difficult” separation scenarios.
Under the difficult scenario, Alberta’s economy could be 16 per cent smaller after 20 years, employment nearly five per cent lower and annual deficits above $30 billion.
The smooth scenario assumes Alberta maintains access to major trade markets, expands resource development and delivers some government services more efficiently.
However, the report warns any recovery could take years and depend on favourable conditions such as sustained high oil prices.
Finance Minister Jason Nixon said the findings demonstrate why the government is urging Albertans to remain in Canada.
“Alberta’s government has always been clear: we support a strong and sovereign Alberta within a united Canada,” Nixon said.
“That is what we will continue fighting for each day.”
The findings come months after Smith herself estimated the transition could cost considerably more.
“I came up with $400 billion in transitional costs that we’d have to assume,” Smith said in June, citing Alberta’s potential share of federal debt, defence, social programs and regulatory agencies.
Smith, who opposes independence, previously said there were “probably hundreds of billions of dollars” in start-up costs required to create a functioning national government.
The Alberta Transition Council, which advocates for an independent Alberta, is expected to table a costed analysis of their own in the coming weeks.
Meanwhile, the Canada West Foundation estimated separation could cost more than $200 billion.
An expert panel chaired by economist Jack Mintz similarly concluded separation would bring significant short-term costs but uncertain long-term effects.
“The panel concurs that separation results in short-run economic costs for Alberta for uncertain net benefits in the longer run,” Mintz said.