Is western separation a real possibility? The cost of Alberta secession

Why is it farmers will tour countless variety plots and study mounds of test data to find a one or two per cent yield advantage, yet are willing to bet the farm on key structural changes based on nothing more than political slogans?

Case in point: Once again western separation has become a hot topic. Many readers will argue this shouldn’t be taken seriously; it’s just coffee-shop talk. But is it?

In February an Angus Reid Institute poll showed 50 per cent of Albertans would support secession from Canada. Since then Premier Jason Kenney on multiple occasions has suggested Alberta separation is a real risk, and endless pundits are pushing a western separation narrative as a solution to the economic doldrums caused by low commodity prices and lack of infrastructure to move commodities to market.

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Side view of a farmer using smart phone in field

Most interesting, it seems rural Albertans are on the front lines of this separation movement, and farmers I have talked to point to the unresolved pipeline issue as a primary reason for secession from Canada.

While it is easy to understand the frustration of those in the energy industry, it’s a little confusing that farmers are leading the call for secession based on the pipeline question. After all, agriculture is an energy-intensive industry and more export capacity would likely lead to higher energy costs. Plus, the ag industry was hurt by higher labour, service, and equipment costs that resulted during the last energy boom.

Instead, farmers should be asking what effect secession would have on their farms. Yet not one farmer I spoke with could discuss the issue concretely. In fact, none did more than regurgitate the rhetoric they’ve been hearing, either pro or con for secession.

So I attempted to find the answer myself. I posed the question to numerous politicians, economists, and pundits. And I emerged just as disappointed.

My search started with the Alberta government. In May, Premier Kenney stated separatist sentiments in Alberta are on the rise. He says the Angus Reid poll shows half of Albertans see separation as a “real possibility.” On August 3, 2019, Kenney tweeted: “Albertans have been rightfully frustrated by the unfair deal we are getting in the federation going as far as to even express support for separation. I don’t want to let @JustinTrudeau push us out of our country. I’d rather focus on separating him from the Prime Minister’s office.”

If the Alberta premier sees separation as a real possibility, you’d think his government would be looking at the impacts of such action. Unfortunately, emails and phone calls to the Alberta government seeking answers to my questions were never returned.

I got a similar response from every agricultural economist I tried to contact. In most cases my emails and phone calls were simply not returned. Those I did manage to speak with declined to be interviewed.

So I turned to individuals who are proponents of separation. Surely they must have assessed the impact secession would have on farmers, given agriculture is a major economic driver on the Prairies.

Author Peter Zeihan suggested in his 2014 book The Accidental Superpower that he believed both Alberta and the U.S. would benefit from Alberta joining the United States as the 51st state. However, when I posed the question about the impact on secession from Canada on Alberta farmers, the picture he painted was not nearly as rosy.

Here is Zeihan’s revealing reply: “That’s a messy question because it depends upon decisions being made that no one has yet started discussing. An independent Alberta would absolutely need to have its own currency and own trade policy and would not have access to the Canadian market or Canadian trade pacts. You know how the big stuff in Canada works: each province of size can block everything. You can count on B.C. blocking everything, and the rest of Canada not exactly being favourably inclined.

“Since independent Alberta’s trade balance would be very strongly positive (all that oil), the new currency would rapidly appreciate. Canadian grains already suffer under some of the biggest price discounts for their quality bracket in the world because they have to compete in the over-saturated European and North American markets. In the scenario of an independent (landlocked) Alberta, they would lose all price competitiveness and the entire agricultural sector would likely crash.

“The only way forward (post-independence) to avoid that end would be to seek merger with the United State… Which begs the question: membership in the Canadian system is no longer working for Alberta, but is membership in the American system a price that Albertans are willing to pay to get away from it.”

Columnist and author Lawrence Solomon was much more positive: “Because the federal government would need Alberta’s co-operation to maintain transportation links between B.C. and the provinces to the east, Alberta would be in a strong bargaining position in negotiating access for agricultural goods to markets east and west. And the federal government would have no say in agricultural trade south of the border. All told, Alberta should have additional agricultural markets to pursue, and of course wouldn’t be as likely to get caught up in trade disputes.

“Because Alberta wouldn’t be supporting the rest of Canada, the tax burden on Albertans in general — including the agricultural sector — would generally diminish. And since few of the many federal subsidies that go to the agricultural sector benefit Albertan agriculture, Alberta agriculture would not lose out on these transfers.

“I don’t see any obvious downsides, only upsides.”

Unfortunately, Solomon did not elaborate on what barriers are stopping Alberta farmers from selling into U.S. markets now, or what would happen to Alberta’s share of crop insurance, AgriInvest or federal agricultural research and marketing activities.

In December 2018, Dr. Jack Mintz, University of Calgary, wrote in the Financial Post: “Alberta has better reasons to Albexit than Britain did for Brexit.”

But when asked about the impact of an “Albexit” on farmers and agriculture he answered: “I am not sure I have much to say about agriculture outside of the obvious issues that would be involved with transportation to the coasts. I guess there would be a more responsive Alberta government to concerns and general impact of different tax and regulatory policies. It all depends what would happen.”

Is western separation a real possibility? Or is this all politics? Are the billboards promoting secession nothing more than electioneering?

Are these Western Canadians attempting to gain economic and political power by threatening secession, but not really intending to ever follow up?

Unfortunately, given that the 1990’s constitutional crisis in Quebec resulted in legal opinions that a simple majority vote can justify secession, the risk is real. Western Canadian citizens may be more willing to separate than the politicians and pundits who are using secession as a bargaining chip. After all, the Environics Institute poll this past winter found 56 per cent of Albertans and 53 per cent of Saskatchewan residents agree with the statement, “Western Canada gets so few benefits from being part of Canada that they may as well go it on its own.”

Now is the time farmers need to be asking exactly what the actual benefits and costs are.

I question if farmers promoting secession have any vision for what a separate Western Canada would look like and what the consequences for agriculture would be.

As the old saying goes: Be careful what you wish for, you may just get it.

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