Alberta Prosperity Project releases fiscal plan, predicts surplus in billions within 1 year of separation

CBC

12 hours ago

The Alberta Prosperity Project's new draft fiscal plan is projecting Alberta's economy could double within 20 years of separation.
The Value of Freedom: A Draft Fully Costed Fiscal Plan for an Independent Alberta was released Thursday. It estimates a surplus in the billions within the first year of independence from Canada.
"Alberta can literally become the most prosperous country in the world with the highest GDP per capita of any country in the world," said Jeff Rath, a co-founder of the separatist group, which announced in May that it would push the province to allow a separation referendum later this year.
Some experts say Thursday's fiscal plan lacks clarity, and that despite the project's claims of making conservative estimates, the numbers could be an overestimation.
"There's a lot of knowns and unknowns in the plan," said Charles St-Arnaud, chief economist at Alberta Central, a group representing credit unions in the province.
"Especially when we look further down the road — it's not clear how it all holds together," he said.
Speaking at a hotel in downtown Calgary, Rath said his group's research — which cites sources such as Statistics Canada, the Government of Alberta and public documents from provincial accounting firms — shows a surplus of between $23.6 and $45.5 billion per year.
Once divorced from Canada, the province would also stop paying equalization payments, saving $44 to $47 billion, he said.
St-Arnaud, however, said that all hinges on whether Alberta is able to cover the cost of services the federal government is already paying for.
"There might be a saving there by not having to be a net contributor to equalization, for example, but the cost of setting up all those new programs, all those new institutions will be probably higher than what they expect," he said.
Conservative estimates
The plan estimates a 33 to 55 per cent tax cut for Albertans in the first year, as well as deregulation for businesses.
It also outlines a doubling-down on oil and gas production, with production hitting 9.5 million barrels per day by 2045. Recent forecasting from S&P Global Commodity Insights anticipates annual production to reach 3.5 million barrels per day this year.
St-Arnaud said this could be an overestimation, as the plan puts the cost per barrel at $85. Current prices are just under $70 a barrel.
"There's a bit of careful consideration that needs to be taken there that maybe we're having a bit of an overestimation of what will be the long-term benefits because of those assumptions," he said.
Rath said the plan uses "extremely conservative estimates" to make those assumptions, resulting in numbers reflecting the least positive outcome.
University of Calgary political science professor Lisa Young notes that the plan does take into account the fluctuation in oil prices.
"They acknowledge that demand for oil will peak relatively soon and then decline," she said, demonstrating they are thinking about potential swings in the economy.
Still, Rath said they believe there is no sign demand for oil and gas will shift.
"It's kind of like Al Gore saying the oceans are boiling," he said, referencing comments the former U.S. vice president made several years ago about climate change. "Every five years somebody says that the end of the earth is coming and nobody has yet to come up with an economic alternative to oil and gas."
Young said the plan still lacks "robust" analysis from economists — and it leaves several questions about the nuts and bolts of separation unanswered.
"Have they taken into account the frictional costs of separation?" she said. "Have they taken into account the many people who would pack their bags and leave the province and not want to be part of Alberta?"
Pension payments and currency concerns
Another area of uncertainty is the plan to shift to an Alberta Pension Plan — like the one the United Conservative government has proposed.
Using data from a 2023 LifeWorks report, the plan says the Canadian Pension Plan owes Alberta $334 billion. With its conservative estimates, the plan assumes the province would receive $167 billion in 2026.
Rath also said an independent Alberta would reduce pension payments but double pension payouts.
But St-Arnaud said this is based on the assumption that Albertans are generally richer and can contribute more, but also that they are younger and will use less of the money.
"But Albertans are gonna get older anyway," he said. "Yes, Alberta is still younger than the rest of Canada, but that gap is narrowing quite rapidly."
He also said one key mistake the plan makes in its revenue estimates is combining returns from the Alberta Pension Plan with overall fiscal revenue.
"That amount of revenues shouldn't be included in fiscal revenues because that's the way pension funds work, and that's the way the CPP works at a federal level," he said. "It's an independent entity."
Rath said Alberta would also adopt the U.S. dollar, before eventually shifting to an Alberta-specific currency.
Young said the potential effect this could have is not clear.
"What would it mean to adopt the American dollar all of a sudden, right? What would that do to people's personal finances?" she said.
Opposition petition 'a bad joke'
At the same press conference Thursday, Rath addressed questions about a competing petition plan that would call for Alberta to stay in Canada.
"It's a bad joke," Rath said. "It's not a petition that we're taking seriously."
The Forever Canada petition, led by former Progressive Conservative Thomas Lukaszuk, is posing its own referendum question about staying in Alberta.
Rath said this will not disrupt his group's plans to submit a question on separation because theirs is a constitutional challenge, not a policy one.