In the early 1980s, New Zealand suffered a debt crisis. The silver lining was that, when backed into a corner, the nation of 3 million deregulated and cut government spending tremendously. Without the crisis, New Zealand would have proceeded deeper into debt, economic isolation, and irrelevance. There would have been no catalyst for the policies and resurgence that became known as Rogernomics, named after then Finance Minister Roger Douglas.
At present, Canada is falling behind the United States in a variety of metrics. As detailed by me and my coauthor Paz Gómez in Financial Sovereignty for Canadians (2024), this is especially problematic with regards to capital per worker and innovation. Both spell lower productivity and emigration of the most ambitious young talent.
Atlantic Canadians are all too familiar with such a trend. Anyone curious about Canada’s trajectory can travel to the likes of Nova Scotia right now and get a taste of economic backwater status, welfare dependence, and even reverence towards public-sector employment. For half a century, Nova Scotians have gravitated to greener vocational pastures in Alberta. The land of bison, cowboys, and the Rockies is easily the freest Canadian province, as ranked by the Fraser Institute, and more aligned with the US Mountain States culturally.
Given Canada’s structural shortcomings and toxic, disconnected political class in Ottawa, Alberta independence presents a win-win-win. First, Albertans will find a new lease of life with a more accountable, dynamic, and cost-effective government that fits their distinct polity.
Second, while Canadians will in the short term experience fiscal challenges, Ottawa will have no choice but to face reality. The central government will be more responsive to the remaining provinces, acting as a limited service provider and less as an impositional and redistributive entity. Canadians will almost certainly witness a repeat of the 1990s liberalization and austerity, which ironically took place under the Liberal Party. Further, albatrosses such as supply management and the Canada Post monopoly will be on the chopping block.
Third, an independent Alberta will breathe a new lease of life into secessionist movements and decentralization initiatives the world over. Unfortunately, economic freedom—which in many regards is the mirror image of centralized power—has been in decline since the turn of the century. Francis Fukuyama wrote The End of History and the Last Man in 1992. However, we have actually seen general backsliding in both economic freedom and democratic institutions.
Governments do not voluntarily relinquish power, so the antidote is determined and unstoppable constituencies that opt out. More akin to competitive providers in the private sector, new governments can then offer better services at lower prices and attract more capital for investment. Meanwhile, the legacy governments like the one in Ottawa will have to work harder to stave off further secessions.
There are dozens of secession movements across the globe, thousands if you broaden the definition. My favorites are Cortés from Honduras, Texas from the United States, and Ireland from the European Union. All promise tremendous benefits but struggle to get off the ground, chiefly because of status quo bias.
Given such a strong position to achieve independence peacefully and then thrive, the shot in the arm from Alberta’s independence will be monumental and healthy. Borders have moved throughout history, and they will continue to move. Alberta can be the one to thaw the ice and move the Overton window towards jurisdictional renewal and next-generation governance.
