The Unknown Economic Future of An Independent Alberta

Pro-independence activists in Alberta are confident they’ll collect the almost 178,000 signatures required to trigger a referendum on the province’s nationhood. That means Albertans, especially the 29% who say they’d vote for independence if given the chance, should be aware of the economic uncertainty that sovereignty might bring.

The Alberta Prosperity Project (APP), the driving force behind the Alberta separatist movement, envisions a future where government revenues are large enough to eliminate the need for income tax while still covering the cost of health care, social services and a new military.

Downside risks don’t make much of an appearance in the APP’s literature, nor in the responses the group shared for this story.

But doubt exists. If the push for a referendum survives its current court challenges, independence may not be the frictionless experience the APP expects. The anticipated financial benefits may be delayed or less than promised.

The pillar: Enormous government revenues, a juicy surplus and massive job growth

The APP’s vision of a prosperous, independent Alberta is predicated on a de-regulated, resource-driven economy that generates annual revenue of up to $149 billion and an annual surplus of between $23.6 billion and $45.5 billion. (For 2026-2027, the Alberta government forecasted about $74 billion in revenue and a deficit of $9.4 billion.)

Dennis Kalma, co-author of The Value of Freedom, a fiscal plan for an independent Alberta, said the group’s figures combine current revenue levels with federal taxes and levies collected from Albertans — including personal and business income tax and GST — which the APP argues would remain in Alberta after separation.

It’s estimated that Alberta sends at least $68 billion annually to Ottawa in federal taxes and other transfers. If those revenues remained in Alberta after separation, adding them to the approximately $73 billion the Alberta government currently collects would produce total revenues of about $141 billion. Subtract projected expenditures of roughly $112 billion, also drawn from The Value of Freedom, and the resulting surplus would be around $29 billion.

But that’s if Alberta’s economy takes flight. Dr. Jack Mintz, President's Fellow at the University of Calgary’s School of Public Policy, says that’s unlikely to be the case in the near-term.

“My view is that there would be a great deal of uncertainty at the beginning. It would be negative in terms of the economic shock. What it does in the long run will depend on what ultimate arrangements are done,” Mintz says.

The APP’s economic projections also assume substantial growth in employment — up to 450,000 new jobs within the first five to 10 years of independence — as part of Alberta’s “energy super-future.”

The group might be overestimating that energy-related job growth, says Ricardo Acuna, executive director of the Parkland Institute, a research centre at the University of Alberta.

“Increasingly, these oil sands developments are having growth without the jobs,” Acuna says.

“They're using way more automation … and way fewer workers. So that direct correlation between ‘We're going to increase production’ and ‘We're going to get tons more jobs,’ it's not even as strong now as it was 20 years ago, never mind what it's going to look like going forward.”

A thriving economy is the pillar supporting the economic case for separatism. Without it, it’s hard to imagine an independent Alberta delivering the financial benefits the APP has in mind.

Taxes, and everything they pay for

Here’s where things start getting sticky.

The APP has proposed a future with no personal income tax, corporate income tax or GST, explaining on its website that “a true zero-tax option becomes viable only if we grow the economy with multiple new pipelines and ramped-up production.”

Eliminating these taxes would conceivably wipe tens of billions of dollars from the APP’s income projections, and knock a sizable hole in its assumed annual surplus. While this would lighten the average family’s tax burden, it’s fair to wonder what would happen to government funding for health care, First Nations and social services if revenues fall short of the APP’s projections.

“I mean, [an independent Alberta] could totally come up with the money to do that if they maintain the current level of taxation,” Acuna says. “If they drop the level of taxation, there's no way they're doing that.”

Kalma said there would be “some level of corporate tax” — possibly 10% — and that increased royalties from Alberta’s resources would generate “a lot of cash as well.”

Would that be enough to cover a fully funded social safety net? The APP says yes, allotting up to $18 billion for Indigenous programs, employment insurance and health programs, per The Value of Freedom plan.

The use of the phrase “health programs” suggests universal health care may not be on the table in an independent Alberta, which would no longer be governed by the Canada Health Act.

Kalma said that could allow for some combination of private and publicly funded health care similar to what residents of Australia and Holland currently have. (Health insurance in the Netherlands works out to about $3,600 CAD a year using figures from Dutch insurance company Feather.)

Acuna doesn’t see this going well for Albertans.

“It's quite easy to believe that Alberta would move full into U.S.-style private health care,” he says. “It's the most expensive per capita health care system in the world.”

Mintz, however, believes a hybrid health care system could be more efficient. Better results might be worth the cost.

“We get so fixated on the U.S. that we forget that there [are] other countries around the world that do more,” he says.

Health care is just one piece of the taxation puzzle. If tax rates shrink, and Alberta’s economy falters, the money needed for all other government spending thins out. Will an independent Alberta run deficits to fund Indigenous initiatives and welfare programs, or could those programs be scaled back or eliminated?

Retirement

Albertans would no longer be able to contribute to Registered Retirement Savings Plans (RRSPs) or the Canada Pension Plan (CPP). So what becomes of their retirement savings?

With RRSPs, a few hypothetical scenarios come to mind.

Albertans may have to withdraw their savings and pay both withholding taxes and income tax on the additional income — similar to what non-residents encounter today. Maybe the Alberta government pays the deferred taxes to Ottawa and recoups the amount from Albertans when withdrawals are made.

The first scenario would be painful for Albertans, the second for Alberta. Acuna estimates that the deferred taxes owed by Albertans on their RRSPs could be in the billions of dollars.

Kalma sees the loss of RRSPs as a moot point in a low- to no-tax environment.

“Savings will be just savings, their gains not taxed and the individual could decide how to deal with their own retirement with due consideration alongside the national pension systems,” he said.

Instituting a new pension system might be fairly straightforward. Alberta could establish its own Alberta Pension Plan, funded through a transfer of at least some of the CPP’s current holdings. The amount Alberta would be entitled to based on residents’ historical contributions is widely disputed. The Value Of Freedom 2026 estimate is $167 billion, which, if it pans out, is pretty decent seed money.

According to Mintz, an Alberta Pension Plan with lower payroll taxes could still provide benefits equal to what the Canada Pension Plan currently delivers.

More questions

These are just some of the financial considerations when weighing the risks and benefits of a sovereign Alberta. Others include:

The common thread among these topics? Uncertainty. The only place an independent Alberta exists is in the future, which no one can promise a clear view of.

A big decision

Evaluating Alberta’s sovereignty through a financial lens is one way to focus your thoughts around it. Like any other financial decision, it’s important to consider the positives and negatives.

Let’s say someone told you tomorrow to buy a house in Calgary because they think it will appreciate 10%-15% every year you own it.

You’d want to believe it, but knowing how cyclical real estate is, and how home values are currently being throttled by local, national and international factors, you’d wonder how this person can be so confident in their view of the future.

That doubt might contradict what your emotions are telling you to do, but skepticism is rarely out of place when a choice carries heavy long-term consequences.