Identity, culture, or historical grievances drive many independence movements around the world. Quebec’s sovereignty movement, for instance, centres on language and cultural differences with the rest of Canada.
But Alberta’s separatist impulse is different—it’s almost entirely about money.
Survey research by University of Alberta political scientist Jared Wesley and colleagues shows that among the roughly one-fifth to one-third of Albertans who, depending on the year, support the idea of separation, the vast majority cite economic and tax-related reasons. And a striking 88 percent cite a desire to “exit the equalization system.”
When the argument for separation leans so heavily on economics—as it often does in Alberta—it’s worth examining the claims more closely.Disclosure: I am a member of the Alberta government’s AlbertaNext panel.
A recent report from the Alberta Prosperity Project, the group leading the referendum effort for Alberta to separate, offers a perfect test case. The report promises a lot from independence: an oil production boom reaching nearly 10 million barrels per day within two decades, a “New Alberta Dollar” backed by gold, oil, and Bitcoin, and government budget surpluses of between $23.6 and $45.5 billion. With such windfalls, they argue, an independent Alberta could eliminate personal and corporate income taxes, as well as the GST, entirely.
But the reality is far more complicated—and far less promising. The Alberta Prosperity Project numbers simply don’t add up.
Fiscal fantasy
Let’s start with taxes. Scrapping income and sales taxes would cut nearly $80 billion from government revenues—that’s the combined current federal and provincial take from these sources. This amount represents over half of what the Prosperity Project assumes the new country would collect in total revenues. You can’t eliminate more than half your income and still balance the books. Indeed, the lost revenue from eliminating these taxes is worth roughly twice as much as the Prosperity Project assumes Alberta’s surplus would be.
The expenditure side fares no better. The report casually eliminates Old Age Security and the Canada Child Benefit entirely, creating a roughly $10 billion spending gap with no explanation of what replaces these programs for Albertans.
Defence spending reveals another fantasy: while the report estimates Alberta national defence would cost a modest $3 to $5 billion, meeting NATO’s 2 percent of GDP target would require $10 billion initially, rising to $25 billion under the alliance’s new 5 percent target.
Perhaps most questionable, the fiscal projections appear to treat investment income from a separate Alberta Pension Plan as government revenue available to cover general expenses. Currently, the Canada Pension Plan is completely segmented and isolated from any government’s budget, ensuring returns are used only to sustain future benefit payments and keep contribution rates down.
It is true that the federal government raises more in revenues from Alberta-based taxpayers than it spends in the province on programs. In 2023, the gap was roughly $14.5 billion. But an independent Alberta’s finances would be anything but secure.
