An Alberta flag flies at an Alberta Independence petition signing location in High River, Feb. 5.Todd Korol/Reuters
Claude Lavoie is a contributing columnist for The Globe and Mail. He was director-general of economic studies and policy analysis at the Department of Finance from 2008 to 2023.
The separatist pitch, in Quebec and Alberta alike, rests on a seductive premise: cut loose from Ottawa, keep your taxes and prosper. It sounds like common sense. It isn’t. While an independent Quebec or Alberta would be economically viable and relatively wealthy, separation would entail significant economic costs. The question is whether they are worth it.
In official documents such as “Le livre bleu” and “Un Québec libre de ses choix,” the Parti Québécois argues that self-governance rooted in Quebec’s distinct values is the only path to the province’s full economic potential. It contends that nearly half of the province’s tax revenue flows to Ottawa with little services in return, and that independence would have significant new funds to invest according to the priorities of Quebeckers alone. In a mock-up of a first budget for an independent Quebec, it claims economic growth could accelerate after separation.
Similar arguments have emerged from Alberta separatists. Groups such as the Alberta Prosperity Project argue that Alberta subsidizes the rest of the country while getting punished in return with unfriendly policies, and that, free from Ottawa, it would rank among the world’s most prosperous nations.
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Provincial sovereigntists – including Scottish and Catalan separatists, and Brexiters previously – rely on two core arguments. The first is that having a country more coherent with the population’s core values and freed from federal shackles would unleash a wave of pride and productivity. The second is that retaining all provincial tax revenues – rather than sharing them to fund federal programs they don’t want or need – would strengthen their economies. Similar to two people who divorce so they can spend their money on what they want instead of compromising with their partner. Both arguments collapse under scrutiny.
The pride argument might have carried weight when Quebec francophones faced genuine economic discrimination. That era has long passed. Quebec’s economy has grown faster than most other provinces over the past decade. Albertans are among the wealthiest people in the country. These are not the conditions of oppressed economies – and a bitterly contested referendum would generate more anxiety than inspiration.
The fiscal argument is equally shaky. Yes, a sovereign Quebec or Alberta would collect all its own taxes. But it would also bear the full cost of services that Ottawa currently provides at scale: national defence, embassies, border control, Employment Insurance, Old Age Security, a criminal justice system. Large, fixed costs mean that a province of four or nine million people would pay far more per capita for these services than a federation of 40 million.
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Separation would also mean forgoing the risk-pooling benefits of Canadian federalism. When Quebec’s or Alberta’s economy falters – whether from natural disasters or global energy policies that drive down oil prices – transfer payments from other provinces help cushion the blow for local populations. It is easy to resent contributing to equalization and employment insurance in good times, but those mechanisms prove their worth when fortunes turn.
A newly independent province would not necessarily inherit Canada’s trade relationships. Washington and Brussels would have no obligation to extend existing agreements automatically – and both would want to take advantage of the province’s weaker negotiating positions to demand concessions. Add to that the unresolved questions over Indigenous rights, national debt allocation and the disposition of shared assets, and you have a prolonged period of uncertainty that economies hate.
Separatists dismiss such concerns as fearmongering. But the evidence is hard to dismiss. Brexit reduced Britain’s GDP by an estimated 6 to 8 per cent – and the British economy was far less integrated with Europe than Alberta’s or Quebec’s is with the rest of Canada. The 1980 Quebec referendum accelerated Montreal’s economic decline. Even the famously amicable Dissolution of Czechoslovakia produced measurable short-term economic damage.
Are these costs worth it to preserve French culture? Independence won’t change the fact that Quebec francophones are seven million on a continent of 380 million anglophones. Having its own border agents wearing the Fleur-de-lis instead of the Maple Leaf won’t help sustain the French language and culture. Quebec already has all the powers it needs to defend its cultural identity.
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Instead of playing the victim, it can use its spending powers to promote French culture and language, and ensure the rest of the country recognizes it as a national asset. French carries more weight within a bilingual federation – with francophones in cabinet, on the Supreme Court and leading national institutions – than it would in an isolated state.
A landlocked Alberta, representing about 1 per cent of the North American population, will not have a better control of its destiny outside Canada either.
None of this means Ottawa is blameless. The federal government has spent decades encroaching on provincial jurisdiction, creating redundant bureaucracies and fuelling the very resentments that feed separatist movements. It must recognize that provinces are better positioned to address local needs and that Quebec is distinctly unique.
The answer is genuine decentralization: Withdrawing from areas that constitutionally belong to the provinces, eliminating duplication, and limiting federal intervention in provincial domains to setting national standards for the movement of people, goods and capital. Further symmetric or asymmetric decentralization could also be beneficial for the economy by improving resource allocation, policy innovations and adaptability.
That kind of reform would serve the whole country – and give Albertans and Quebeckers less reason to want out.