Those observing the leadup to this year’s likely Alberta independence referendum can be forgiven for getting lost in hyperbole. The vitriol directed at sovereigntists, however, will soon seem like a drop in the ocean. The knee-jerk demonization is a ploy to shut down discussion, but Ottawa loyalists have their work cut out for them keeping a lid on the opportunity.
We can with high confidence foresee the policy climate in the new nation. Continuity with a couple of simple, predictable additions—while removing redistribution—points to a nation that will match exemplary city-states like Hong Kong and Singapore. The distinct Alberta electorate can then enact further policies to reach a new frontier for economic freedom.
The British Columbia-based Fraser Institute prepares comprehensive and sober rankings for nations worldwide and subnational jurisdictions in North America. The think tank rightfully notes that economic freedom is vital for many desirable outcomes, including standard of living, lifespan, low infant mortality, and environmental protection. If you are broke, you are less likely to devote resources to preserving the environment.
The top five nations for economic freedom are Hong Kong (1), Singapore (2), New Zealand (3), Switzerland (4), and the United States (5). Hong Kong’s status as a nation separate from China is beyond precarious, so it merits removal from this list. That puts Ireland into fifth spot. Canada is 11th. Note that the top six, aside from the United States, all have populations below 10 million. New Zealand and Ireland have populations of 5 million, right in line with Alberta.
Admittedly, Fraser Institute researchers face data challenges and do not rank totalitarian regimes like Cuba and North Korea or microstates like Monaco and Liechtenstein.
Broader assessments of human freedom knock both Hong Kong and Singapore down a peg, given their lack of civil liberties. Albertans have a strong preference for natural rights, notably free speech and self-defense. That natural-rights inclination goes hand in hand with economic freedom as a chief motivation for many independence advocates.
Canada’s diagnosis shows one glaring shortcoming: the size of government. Canada does not even crack the top 100 with a ranking of 102. Governments of Canada at all levels spend an estimated 44 percent of GDP, and about 10 percent of the annual federal budget goes to servicing the national debt. Keep in mind that government spending varies widely across the provinces, ranging from 61 percent in Nova Scotia to 30 percent in Alberta.
Of the five measures of economic freedom in the Fraser Institute index, Canada also has low-hanging room for improvement with sound money, trade openness, property rights, and regulation. Three reasonable, predictable changes will immediately shoot Alberta to the top of the list.
These are conservative, since they scratch the surface of the policy benefits a free Alberta could offer. The assumption here is relative continuity with only the most predictable changes.
- An end to redistribution. Ottawa steals and redistributes 5 percent of Alberta’s gross domestic product, so this reduction would be immediate and meaningful. Alberta voters will save tremendously on any new pension system by leaving the prevailing Ponzi scheme, and they will only send foreign aid to where they deem it prudent.
- Currency optionality. Once Alberta is free, residents will be able to use the currency of their choice—what has become known as dollarization. That could be the loonie, the US dollar, the Swiss franc, a cryptocurrency, or a combination of the above simultaneously. Albertans will enjoy a spontaneous order gravitating towards the best unit of account, store of value, and medium of exchange.
- Constitutional property. At present, Canada’s Charter of Rights and Freedoms omits property. This was a deliberate departure from Western democracy’s classical-liberal foundations. Albertans can and will make property foundational to the new republic.
The sky is the limit for the new nation of Alberta, which has an opportunity to be the envy of the world. Many important policy changes could be added to the above three. For example, mixed delivery of medical services, allowing private-sector participation, would improve Alberta to match peers like New Zealand and Switzerland. Both spend less overall and in terms of taxpayer dollars and offer better-quality care.
The above predictable changes all but guarantee Alberta’s potential stature as the world’s flagbearer for economic liberty. In many ways, Alberta can offer the economic liberty that the United States touts but fails to deliver, given her own sprawling and unaccountable federal government.
