Calgary could lose between 44,000 and 69,000 jobs if Alberta separates and trade costs rise, according to a new report commissioned by the Calgary Chamber of Commerce. The analysis, prepared by University of Calgary economist Trevor Tombe, examines how leaving Canada could affect trade, investment, workers and public finances. The Calgary employment estimates assume trade costs rise by five to eight per cent and the city experiences a proportional share of the province’s employment decline. They are scenarios, rather than predictions of a specific outcome. “This report puts real data to the concerns we’ve been hearing in the business community for months,” Deborah Yedlin, the chamber’s president and CEO, said in a news release. Calgary’s exposure to trade The report estimates more than 360,000 Calgary jobs, over 36 per cent of employment, depend on exports to other provinces or countries. Those connections extend beyond oil and gas into professional services, manufacturing, transportation, wholesale and retail trade, and tourism. Separation would turn Alberta’s provincial boundary into an international border, potentially introducing additional customs procedures, regulatory differences and other costs. Continued access to Canada’s existing trade agreements could not be assumed. Drawing on research into the United Kingdom’s experience with Brexit, Tombe models higher costs of trading with both the rest of Canada and international partners. A five per cent increase would translate into roughly 44,000 fewer Calgary jobs if the city’s employment decline matched the provincial rate. Under the eight per cent scenario, that figure rises to about 69,000. The chamber also warns that greater uncertainty could affect where businesses invest and whether workers choose Alberta. “A multinational company deciding where to build its next facility, expand operations or deploy new capital can choose among many jurisdictions,” Yedlin said in the release. The report notes that 49 per cent of Albertans were born outside the province, highlighting its reliance on attracting people from elsewhere in Canada and abroad. Pressure on taxes and services The report finds Alberta’s financial position after separation would depend on the economic fallout and the cost of taking over federal responsibilities. Its main illustrative scenario produces an annual shortfall of approximately $9 billion. Under a combination of more favourable assumptions, however, an independent Alberta could have a $1.6-billion surplus. That surplus scenario assumes the economy shrinks by five per cent, borrowing costs do not increase and non-defence federal operations can be replaced at Canada’s current national per-capita spending level. “Different assumptions would produce different numbers,” Tombe writes in the report. Both outcomes would leave Alberta with substantially less than the roughly $19-billion difference between federal revenue collected in the province and federal spending here in 2024. That year, Ottawa collected approximately $73 billion in Alberta and spent about $54 billion, according to the report. An independent Alberta would have to take on responsibilities currently handled federally, including defence, border services and other national institutions. A smaller economy would also generate less tax revenue. To demonstrate the scale of the $9-billion shortfall scenario, Tombe estimates that closing the gap entirely through a sales tax could require an additional eight percentage points on top of the five per cent currently collected federally. Another option would be to increase the corporate income tax rate by roughly 10 percentage points. The eventual economic impact would depend on negotiations, future trade arrangements and the policies adopted by an independent Alberta.
