The Real Financial Cost of Alberta Separation: What It Means for Your Retirement
- Jeremy Schrader
- May 28
- 3 min read
Updated: May 29
Alberta separation talk is heating up, with vocal groups pushing for independence based on what many are highlighting as economic and political grievances. If we were to divorce from Canada, what would separation actually cost Albertans financially?
The Emotional vs. Economic Argument
Most support separation purely out of emotion, but there's significant financial backing behind the movement. As economist Moshe Lander explains, the core economic argument rests on two main pillars: "blocks on pipeline construction and the ability to get a key resource to as many markets as possible" and the belief that "Alberta is currently paying more to Ottawa than it's receiving back."
The theory suggests that independence could magically solve pipeline delay issues and keep transfer payments within Alberta. However, Lander calls this "a bit of a phantom argument," noting that the reality would likely be far more complex and costly.
The Border Problem: Your Investments at Risk
Independence would mean the creation of hard borders with BC, Saskatchewan, and the territories. "There's nothing that says at that point that Canada would be willing to play with Alberta," Lander warns. "At that point, you could now be talking about tariffs (on Alberta) or the lack of a free trade agreement."
Breaking away from Canada would effectively end Alberta's free trade relationship with the rest of the country. As Lander states, "If Alberta tries to go it alone, effectively, what it's doing is it's ending its free trade agreement with Canada."
For retirees and those nearing retirement, this could potentially create concerns around:
Portfolio volatility from major companies relocating from Alberta to another part of Canada.
Property values decreasing as some Albertans move out of the province thereby shrinking the tax base.
Loss of free trade benefits disrupting income from Canadian investments
Currency uncertainty affecting purchasing power.
Quebec's Failed Experiment
The comparison to Quebec is telling. "Quebec went through the separation attempt 30 years ago, much to the damage of their economy that has not recovered a full generation later. Lander notes the Quebec example serves as a stark warning and believes that Quebec is in a weaker position than it would have been if they had just worked within the Canadian Confederation framework.
Economic Uncertainty Already Taking Its Toll
The mere discussion of separation is already causing potential economic damage. Lander references that "we've already seen the head of ATCO say, you're doing damage to our company." (source 1) This economic uncertainty creates a chilling effect on investment and business confidence, regardless of whether separation actually occurs.
Leadership Focus
Rather than leaving Canada, Lander argues Alberta needs better advocacy with Alberta’s leaders focusing on selling Alberta to the rest of Canada. Lander remarks that selling our province to the rest of Canada has been a problem for Alberta going back decades. Lander believes the solution isn't to leave the table, but to play the game better: "The reality is that 343 parliamentarians gather from across the country in Ottawa. It's not that Ottawa makes our decisions. Its parliamentarians do, and so everybody has more or less an equal voice."
Some say that Alberta is underrepresented in Ottawa with only 37 of those 343 seats in parliament. In particular, in the Senate where Alberta representatives hold just 6 of the 105 senators. (source 2)
The Bottom Line for Your Retirement
While Alberta's frustrations may be legitimate, the economic case for separation lessens under scrutiny. Corporate relocations, population loss, trade barriers, and economic uncertainty would potentially devastate retirement portfolios and any savings from keeping transfer payments would be countered by a much greater living standard cost.
For Albertans in or near retirement, the risks could be severe. Fixed incomes generally don’t weather the currency fluctuations, benefit disruptions, and market volatility that separation would bring. Your retirement security depends on economic stability, not political experimentation.
As economist Lander concludes: "All of that economic uncertainty is not being factored into the separation argument." The hard truth is that retirement prosperity for Albertans relies on staying in Canada, with leaders who can better advocate for the province's interests across Canada.
Sources:
David Popowich and Faisal Karmali are Investment Advisors with CIBC Wood Gundy in Calgary. The views of David Popowich, Faisal Karmali, and the guest author do not necessarily reflect those of CIBC World Markets Inc. This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change. Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors. CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc.
Comentarios