Muhammad Amanullah — September 17, 2026
A new economic analysis examining the potential consequences of Alberta separating from Canada estimates that establishing an independent country could cost between $50 billion and $170 billion during the first five years.
The analysis was commissioned by the Alberta government and conducted by the University of Calgary’s School of Public Policy. The university says the study is intended to provide evidence-based information on the potential costs, risks and benefits of separation ahead of Alberta’s October 19, 2026 referendum. (School of Public Policy)
The estimated transition costs would be separate from the possible effects of separation on economic growth, employment and Alberta’s fiscal position.
Why Was the Report Commissioned?
The Alberta government asked the University of Calgary’s School of Public Policy to examine the potential economic and fiscal implications of leaving Canada.
The university said the analysis would assess transition costs, potential effects on government expenditures, and possible risks and benefits for Albertans if the province pursued constitutional separation. The school also said it would not provide a recommendation on whether Alberta should separate from Canada. (School of Public Policy)
Separation would involve more than a political or constitutional change. Alberta would need to establish or assume responsibility for a number of systems and institutions currently operated or administered at the federal level.
Costs Could Reach $170 Billion
According to the analysis, the initial five-year cost of establishing a new country could range from $50 billion to $170 billion.
Potential expenses include creating new government systems and infrastructure, hiring additional public-sector workers, assuming responsibilities currently handled by the federal government and meeting other administrative requirements.
Negotiations over Alberta’s share of Canada’s federal debt and assets could also affect the financial consequences of separation.
Two Possible Transition Scenarios
The analysis examines two potential scenarios.
The first is a “smooth transition,” in which negotiations with Canada proceed relatively quickly and under favourable conditions.
The second is a “difficult transition,” in which negotiations take longer and become more complicated, potentially creating challenges involving trade, market access and other economic relationships.
These scenarios are intended to illustrate how different conditions during the transition could affect Alberta’s economic and fiscal position.
Potential Economic Impact
Under the difficult-transition scenario described in the report, Alberta could face significant long-term economic costs.
The estimates indicate that around 20 years after separation, Alberta’s economy could be 16.2 per cent smaller than it would be if the province remained part of Canada.
Employment could also decline under this scenario, while the income of an average worker could be approximately $12,000 lower per year than under the continued-Canada scenario.
Taxes and Government Debt
The difficult-transition scenario could also place additional pressure on Alberta’s public finances.
The report estimates that the provincial government’s annual budget deficit could remain above $30 billion, while overall government debt could rise substantially.
Under this scenario, Alberta’s government debt could reach approximately $442 billion, including existing debt and additional borrowing associated with post-separation deficits.
Potential Long-Term Benefits
The analysis also considers a scenario in which Alberta manages a relatively smooth transition and maintains access to major international markets.
Under such circumstances, an independent Alberta could potentially expand development of its natural resources and experience longer-term economic growth.
The scenario also identifies the possibility of improved employment and a lower tax burden over time.
However, even under a smooth transition, the province could face significant economic pressures during the early years, while government debt could increase during the transition period.
Separation From the Federal System
The analysis considers several issues that would have to be addressed if Alberta left Canada, including fiscal policy, administration of federal programmes, labour mobility, international trade and the division of Canada’s debt and assets.
A newly independent country would need to establish its own government machinery, information-technology systems, offices and other administrative structures.
It could also need to create institutions to provide services currently delivered through the federal government.
Potential Impact on Canada
The economic consequences would not necessarily be limited to Alberta.
The analysis considers how separation could affect Canada’s broader economy and the economic, financial and trade relationship between Alberta and the rest of the country.
The University of Calgary says its role is to provide analysis rather than advice to voters. Its School of Public Policy has described the project as an independent, evidence-based assessment intended to help Albertans understand the potential implications of separation ahead of the October 19 referendum. (School of Public Policy)
The figures in the analysis therefore represent scenario-based estimates, rather than guaranteed outcomes. Actual economic results would depend on the terms of negotiations, trade arrangements, fiscal decisions and the structure of any future independent Alberta.
