Dennis Kalma is co-lead of the Alberta Transition Council and principal author of Forward to Freedom and the Budget and Costing Report. Both are published in full with the Alberta Transition Plan.The Calgary Chamber of Commerce has published Professor Trevor Tombe’s full report on the economics of independence. It is careful work, and it states its assumptions. It deserves to be assessed on its numbers, so that is what follows.Start with defence, because it is the largest new expense and the clearest illustration of how the two exercises differ.His report applies NATO’s standard of 2% of output, which for Alberta is about $9.5 billion a year. Forward to Freedom uses no alliance target anywhere. It asks a prior question: what would the United States and Canada actually need to see from Alberta, and what does a force that delivers it cost?The answer was airspace surveillance and intercept, no security vacuum on the ground, allied-standard handling of classified material and technology, and self-sufficiency in wildfire, flood, and major incident response. What it did not include was expeditionary capability, power projection, heavy armoured formations, or duplicated strategic enablers such as heavy airlift and airborne early warning — the assets cooperation exists to share. Alberta is also landlocked, so an entire branch of the armed forces, with the shipbuilding and sustainment behind it, does not arise at all.That force costs $5 billion a year, which happens to be 1.05% of output. The percentage is an output of the costing rather than an input to it, and three of the comparators in our own table sit below it while cooperating closely with the West: Austria at 1%, Switzerland at 0.72%, and Ireland at 0.24%. Switzerland has been inside NATO’s Partnership for Peace since 1996 — interoperable by choice rather than by treaty..So applying 2% to Alberta is not a correction to our arithmetic. It substitutes a political commitment for a mission. Forward to Freedom puts it plainly: “a percentage of GDP is an input to a political commitment, not to a costing.” That standard is a political commitment rather than a costing rule. NATO defence ministers set the 2% guideline in 2006, and alliance leaders hardened it into the Defence Investment Pledge at the 2014 Wales Summit, in the months after Russia annexed Crimea. It is a flat share of output asked of every member regardless of the force that member actually needs — a reasonable way to apportion an alliance burden, and a poor way to size an army.If a future Alberta legislature chose to join an alliance and accept its target, the cost would be close to the figure Professor Tombe uses — and our published stress tests already carry that weight without overturning the conclusion. But that is a decision about posture, not a finding about arithmetic.A point of order before going further. Option 2 on the ballot does not take Alberta out of Canada; it commences the legal process required under the Constitution to hold a binding referendum, and that vote would follow. October 19 settles nothing by itself — which is exactly why the arithmetic has to be right now rather than afterwards.Now to the report’s headline: that an independent Alberta faces a $9 billion fiscal shortfall rather than the $19 billion surplus Ottawa currently runs in the province. Table 3 sets out how that is built, and it is worth following line by line.Alberta’s net contribution today is $19 billion. Against that, the report adds new spending: $7.2 billion more for defence, $8 billion for federal operations Alberta would run itself, and $2.7 billion of extra debt service at a higher borrowing rate. That is $17.9 billion..Nineteen billion less $17.9 billion is a surplus of about $1 billion. The report says so itself: “The spending increase alone would take the $19 billion surplus down to roughly $1 billion.”So where does the $9 billion deficit come from? From one further assumption. The report then applies a 10% contraction of Alberta’s economy, which removes $10.1 billion of revenue — $5.8 billion in income taxes, $1.3 billion in consumption taxes, and $3 billion in existing provincial taxes.That is where the deficit comes from. It is the assumed contraction rather than the cost of government: on the spending side alone, Professor Tombe’s own table leaves an independent Alberta with a surplus.This makes the contraction the only question that matters, and here the report is more careful than the headlines written from it. The 10% figure is derived from trade costs rising 5% to 8%, a range “informed based on the Brexit experience for the United Kingdom.” The report states plainly that “these estimates are not forecasts,” that it offers “an illustration of plausible and conservative magnitudes,” and that it is “not an exhaustive line-by-line exercise.” It even says it is written “not as an argument for or against separation.”The Chamber’s press release says: “The evidence is clear.” Those are two different claims, and the more modest one is the author’s.Whether Alberta’s position resembles Britain’s is a real question, and I do not pretend to settle it in a column. Britain left a customs union and a single market of 27 states. Alberta’s largest customer is the United States, and its energy already moves south in volume. Reasonable people can weigh that analogy differently. But it should be weighed, not assumed, because on the report’s own arithmetic it is carrying the entire result..Two further points, briefly.On debt, Professor Tombe apportions a share per capita and adds $2.7 billion for a higher borrowing rate. We do not assign a share at all, because none has been negotiated — but we do test one. Table 13 of Forward to Freedom carries debt service at the population-share ceiling, the highest basis we are prepared to defend, at $6.2 billion a year, with no credit anywhere for the federal assets that would transfer. Remaining annual capacity at that ceiling is $16 to $25.9 billion.Elsewhere, he has said our surplus omits debt interest and half the military the NATO standard implies, and that the two together come to about $11 billion a year. Both are already published. The debt ceiling above is $6.2 billion; lifting our costed force to 2% adds about $4.5 billion. That is $10.7 billion against his $11 billion, and even granting every dollar of it, Alberta still finishes the year between $11.5 and $21.4 billion ahead. That is not a gap in the ledger. It is a stress test we published and answered.His objection on pensions is the more substantive one, and it deserves a direct answer. He says funding Old Age Security through an Alberta Pension Plan rather than the annual budget is “an unsustainable strategy.” Section 6 addresses exactly that and publishes the fallback: if no asset transfer occurred, Alberta would pay the roughly $2.13 billion of non-portable Old Age Security and Guaranteed Income Supplement from general revenue, which “reduces the annual balance to about $18 to $28 billion. It does not overturn the conclusion.”None of this makes the Chamber wrong to worry. Its open letter carries the names of people who run ATCO, Keyera, Capital Power, AltaGas, AltaLink, and Tourism Calgary — the people an independent Alberta would need on its first morning. Their caution deserves a serious answer.The letter also concedes what most commentary will not. “Many Albertans are also frustrated with our place in Confederation,” it says. “Those frustrations are real.” We agree. We draw a different conclusion from the same starting point. That is an honest disagreement, and it is better conducted in figures than in adjectives.But it is a disagreement that can now be located precisely, and that is progress. It is not about whether Alberta could afford a defence force, a border service, or a tax agency. On those, the numbers are converging. It is about whether leaving Canada would shrink Alberta’s economy by a tenth, on the strength of an analogy with Brexit.That is a question worth arguing about honestly. Our workings are published — twenty-one working papers, a domain-by-domain budget, an assumptions register, and a full list of what we deliberately left out, including every upside we refused to count. Professor Tombe’s are now published too, and Albertans are better served for it.Read both. If a figure is wrong, say which one and why.Dennis Kalma is co-lead of the Alberta Transition Council and principal author of Forward to Freedom and the Budget and Costing Report. Both are published in full with the Alberta Transition Plan.
