Apologies for the wind on this video, one of the downfalls of recording with a view…
Enough signatures have been gathered to force an independence referendum and vote in Alberta. Just a reminder that secession is legally possible in Canada following a successful referendum.
The economic case for independence centers on Alberta’s youth and energy sector. With stronger demographics and a booming oil industry, some Albertans feel they disproportionately contribute without the respective influence in government decisions.
While some of this is true, an independent Alberta would still face major economic problems. We’re talking rapid inflation and labor shortages, necessitating a trade agreement with Canada or integration with the U.S. Bottom line is that the grass ain’t always greener on the other side.
Hey everybody. Peter Zeihan here coming to you from Rocca Calascio which was in Ladyhawke. If you haven’t seen it, add it to your list. The news today is that we are going to have a referendum on independence in Alberta. They, the people who are in favor of independence, got the 10% of the provincial citizenry to sign the petition.
So later this year, probably at the end of the summer, we’re going to have the vote. The premier that’s kind of the governor of Alberta has already signed off on it, and away we are for the races. I’m not going to predict how it’s going to go. It is up to the people of Alberta and no one else.
But I want to outline three things. Number one, the Supreme Court of Canada ruled decades ago in the case that if there is a plebiscite and they vote for a referendum, you’ve got to let them go. So this this is legal by Canadian law. Technically, something like this would not be legal in the case of the United States. The Constitution forbids secession. We fought a little war over it. But Canada is different. So that’s piece 1. Piece 2. The economic argument for independence is basically the idea that Canada is aging very, very rapidly and Alberta is not. And Alberta has a dynamic energy sector that has been growing for some time. And as the rest of Canada gets older and Alberta does not. The financial transfers from Alberta to Canada have been getting bigger and bigger and bigger, and the Canadians don’t really give the Albertans much say in how that money is spent, so you can see why they’re a little agro’d. I want to point out a couple of things that have changed in the relationship, though. Over the last 20 years, Canada has really brought in a surge of migrants that have partially addressed some of the demographic issues. So the financial transfer issue is not as horrible in relative terms as it used to be. In fact, at this moment, in relevant terms, Alberta is actually in decent position financially versus the rest of Canada. It’s still by far in net providers the richest province by far. But the imbalance is not as bad as it looked like it was going to be when I first started talking about this issue 15 years ago.
And then finally, should this pass and Alberta become independent, it would be screwed. Alberta is landlocked and their primary exports are oil and grain, and those are US dollar denominated commodities. And so if you have an independent Alberta exporting for hard currency, you have a very inflationary environment very, very, very quickly. That it would be difficult to survive in a country that now has a very, very limited labor pool. So the cost of an independent Alberta would be immense, which means that independent Alberta would need to do one of two things. Number one, negotiate some sort of extensive free trade pact with Canada that would be worse for Alberta than provincehood is right now. It’s kind of like the situation that Brits are dealing with as they talk about going back on Brexit and reentering the EU.
Or number two, apply for US statehood and join the United States, in which case Alberta is still the richest province, would still be a net donator to the national budget, but it wouldn’t be nearly the same. The stretch, the delta between an Alberta state in the United States would not be nearly as large. Anyway, these are the decisions in front of them. How they play out? That’s entirely up to them. The campaign this summer is going to be wild.
