Alberta independence could cost between $50 billion and $170 billion during the first five years, according to a University of Calgary report commissioned by the provincial government ahead of the Oct. 19 referendum.The School of Public Policy was selected by the Alberta government in June to conduct an independent analysis of the potential economic and fiscal effects of Alberta leaving Canada. The school says it retained control over its research, methodology and final report and was not tasked with making a recommendation on independence.Released Wednesday, the report examines two hypothetical outcomes — a “smooth” scenario involving quick negotiations favourable to Alberta and a “difficult” scenario involving prolonged negotiations with less favourable results.Under both scenarios, researchers concluded the transition to independence would produce significant short-term economic disruption and costs.The report estimates establishing a new country could cost between $50 billion and $170 billion during the first five years, separate from potential effects on economic growth and the provincial government's finances.“It has been a great opportunity for the school to help inform Albertans on such a critical issue,” said School of Public Policy director Martha Hall Findlay.“From the start, we were afforded full independence and academic freedom with this project, which was successful under a compressed deadline.”The research was led by Tim Sargent, director of Economic Growth and Prosperity at the School of Public Policy. Sargent previously spent 28 years in the federal government, including in senior positions at Finance Canada, International Trade, Fisheries and Oceans, Agriculture and Agri-Food and the Privy Council Office.Under the report's difficult scenario, restrictions on trade and market access could create long-term economic and fiscal problems.Researchers estimate that after 20 years, employment could be nearly 5% lower and Alberta's economy more than 16% smaller than it would have been had the province remained in Canada.The report also projects that, under that scenario, an independent Alberta government could face an annual deficit exceeding $30 billion despite higher taxes..The smooth scenario assumes Alberta would maintain access to major trading markets, expand resource development and potentially deliver some government services more efficiently.Researchers said an economic recovery could nevertheless take years following the initial disruption and would depend on several conditions, including sustained high oil prices.The University of Calgary says its analysis considers transition costs, potential changes to Alberta government spending and both the potential risks and benefits to Albertans from independence.The report examines issues including responsibility for programs currently administered by Ottawa, monetary policy, division of federal debt and assets, labour mobility and international trade.An expert advisory panel chaired by economist Jack Mintz was also appointed to review the findings and produce a separate assessment.“The panel concurs that separation results in short run economic costs for Alberta for uncertain net benefits in the longer run,” Mintz said.“However, we also stress that Canadians should be aware that Alberta's separation will undoubtedly harm Canada as well.”The panel agreed with the report that independence would involve substantial short-term costs while saying its long-term economic and fiscal consequences remain highly uncertain.The University of Calgary previously said its report would strictly analyze the economic implications of independence compared with remaining in Canada and would not recommend how Albertans should vote.Albertans will vote on the province's future in Canada on Oct. 19..“Albertans have called for clear, credible information to make an informed decision in the Oct. 19 referendum, and the Government of Alberta entrusted the University of Calgary’s School of Public Policy to develop a report that provides this information, said Minister of Finance Jason Nixon in a statement."This independent report outlines important considerations for Albertans as they prepare to vote on the question of separation."“The panel’s assessment emphasizes that both the scenarios outlined in the report highlight how costly it would be for Alberta to separate from Canada in the short term and also highlight the substantial amount of uncertainty Alberta would face in the long term.“Alberta’s government has always been clear: we support a strong and sovereign Alberta within a united Canada, and that is what we will continue fighting for each day.
