So, over at "Alberta Prosperity Project" (APP), they have a "Fully Costed Fiscal Plan". Besides having a whole ton of wishful thinking in its numbers, it demonstrates that the APP is either wildly optimistic about how things will work out post-separation, or they're assuming that you the voter is only slightly smarter than room temperature milk.
Let's dive in, shall we?
Revenues
The APP claims that an independent Alberta would retain some $75 Billion in tax revenues that currently flow to Ottawa. I'm not going to go into a deep analysis of their revenue assumptions, let's assume that those estimates are "good enough".
They argue that because Alberta only gets $22-26 Billion in transfers from Ottawa that the province "over-contributes" by some $44 Billion annually. This is, of course, one of many "sleight-of-hand" maneuvers. Just because Alberta doesn't get back every dollar that its residents contribute in Federal Taxes does not mean that Alberta is being "short-changed". It ignores the fact that the Federal Government implements a whole host of programs and services which a province is not responsible for that a suddenly independent Alberta would become responsible for - more on that in a moment.
The ambitious doubling of Alberta oil production over the next decade or so ignores the changing energy markets, and does not show where the demand for that production is coming from. Just pulling it out of the ground without having a customer for it will rapidly place Alberta in the same economic mess that sanctions have pushed Russian oil into, where production may have to be paused for long periods in order to find markets for the oil you've already got sitting in stockpiles.
Analysis - Tax Reduction
Like any typical Alberta populist, one of the things you find lurking in here is the claim that they can not only create a "new and efficient government" for next to nothing, but that they can actually cut taxes while they're at it.
This is stunningly naive, and only makes sense when you look at the rest of their "plan" and realize that it's composed primarily of fairy dust and unicorn farts. The blunt reality is that most of their plan makes enormous assumptions that will fall apart when faced with the reality of the situation.
Replacing Federal Services
The very next section is a list of estimated replacement costs for various federal programs. To put it kindly, this looks like they pulled a bunch of numbers out of the air.
There is little or no explanation of where these numbers are derived from. To put it kindly, these numbers should be looked at as wishful thinking with very little substantive analysis backing it up. I don't believe that any of them should be taken seriously.
Analysis - Defence
Defence spending as a central example needs to be carefully considered - what are Alberta's defence needs, and then what would you have to spend to actually implement the needed systems.
For example, what does Alberta propose it needs in order to defend its borders? Where do key defence installations need to exist, and what do those look like?
Do we need Air Force capability, and what does that look like? Naval capacity? (yes, I know Alberta is landlocked - that's not the point - you still ask the question)
What structure would the Alberta military take on? Where do we train soldiers, do we have adequate facilities to do so, and so on.
Oh, and for fun, let's not ignore the fact that militaries themselves require significant industrial capacity to support equipment. Alberta is short on industrial capacity to manufacture parts, or even to do routine maintenance on large equipment.
Planning all of this is a multi-billion dollar project in its own right. Bases don't just appear out of nowhere, and then there is equipment acquisition. Anyone who thinks it's just a case of calling up Boeing and saying "hey, ship us a bunch of F-35s" is completely overlooking the timelines and complexity of any military acquisition.
To simply wave a number like $1-2 Billion in "setup costs" around is wildly unrealistic. Without a coherent plan as to what the military should look like, and an intelligent analysis of its role and parameters of operation, that number is at best a wild guess, and worst it's papering over what is likely to turn out to be a money pit.
The same thing applies to the rest of the "list of services" - the simple fact is that the list is likely incomplete, and ignores a plethora of really big issues that the separatists simply haven't had the time to think about.
CPP Replacement
Again, this entire section is a huge amount of wishful thinking on the part of the APP's writers. To estimate that "Alberta's contributions to CPP" are some $334 billion is wishful thinking at best, and frankly even demanding that Canada turn over half that amount as a direct transfer is ... well ... laughably optimistic.
They claim somewhere around 10% annual returns - but when we consider that this would be handed over to the notorious AIMCO, which consistently lags 2-3% below the returns that other investment managers would take on, I would argue that is wishful thinking.
As with so much of the APP's propaganda, their plan for an Alberta Pension Plan is wildly optimistic and filled with assumptions that overlook significant risks and downsides arising out of the entire independence project.
Risks They Aren't Talking About
The APP loves to spread a sunshine and rainbows narrative about separation. They're lying. They are ignoring the very real, and problematic consequences of tearing a country apart.
Referendums Are Economically Damaging
Quebec's experience with separatist referendums shows us quite clearly that sovereignty referendums have major economic and social impacts. The chaos leading up to Quebec's 1980 referendum resulted in several hundred businesses leaving the province, similarly, the 1995 referendum ultimately left Quebec's economy in a shambles which the province has struggled to recover from. Where Montreal and Toronto were all but jointly the financial hub of Canada before 1980, the 1980 referendum broke that, and the 1995 referendum triggered a significant "brain drain" of professionals leaving the province for more stable pastures.
Looking towards Europe, the Brexit referendum and the fallout from that punched huge holes in the UK economy. The United Kingdom was led to believe that voting "yes" would result in all kinds of financial windfalls for the UK, as money that was going to Brussels would suddenly be spent at home (sounds familiar, doesn't it?). The reality is that not only did Brexit trigger a massive spike in inflation, but the money that was supposedly going to be spent at home never materialized.
The Alberta separatists want you to believe that everything will continue to tick along just as it has. This is completely delusional. Not only does the sovereignty "debate" itself sow uncertainty that scares off investment, the negotiations that would ensue following a "yes" vote would unquestionably terrify investors (not to mention the likely departures of many from the province).
Alberta's economy is much more vulnerable to economic chaos than you might first imagine. In spite of what the oil patch claims, the fact is that the oil industry is already shifting from expansion and growth into sunset status. Automation is already reducing head office and operations job counts, and given that most of the players in the industry have significant positions outside of Alberta, you can expect to see massive shifts in where work is done during and in the wake of a referendum. Alberta will suffer enormously from this project.
Also, an Alberta that isn't recognized as a nation state in its own right is going to find it very difficult to attract foreign investment in anything, and frankly the $500 Billion line of credit that Rath is supposedly negotiating with the US isn't going to do anything except guarantee an "independent" Alberta's status as slave state to US interests. Any dreams of selling Alberta oil abroad will evaporate into the terms of that line of credit.
Citizenship
The APP people seem to think that there's a "have your cake and eat it too" thing going on. According to their propaganda, you'll still be a Canadian citizen, and able to travel using a Canadian passport. While there may be a grace period where this is true, don't be surprised to discover that even when there is an Alberta passport, it may not be recognized outside of ... well ... Alberta.
Travelling to visit family in another province - something we do pretty regularly - is going to be a whole lot harder. How cooperative do you think the rest of Canada is going to feel after Alberta gives them the finger and declares sovereignty?
The US isn't known for handing out citizenship to its territories either - an Alberta dumb enough to tie itself to US interests will find very quickly that its citizens are beholden to US interests with none of the benefits of citizenship (and likely all of the downsides).
Conclusion
The APP's "fiscal plan" is not "fully costed" - not by a long shot. At best I would consider it optimistic, at worst it's fantasyland material that should be treated as wishful thinking. The APP is engaging in one of the most ambitious campaigns of lies I've ever seen. They're hoping to fill the void with so much chaos and noise that you won't look closely at their claims.
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