When Prime Minister Mark Carney stood on Parliament Hill last week and declared, “We’re renovating the country as we go, and Alberta being at the centre of that is essential,” he was speaking against the backdrop of a province that had just announced it would hold a referendum on whether to remain part of Canada. The words were carefully chosen. Whether the policy will follow is the question tearing at the seam of Confederation.
Premier Danielle Smith has since confirmed that a question on independence will be added to the October 19 referendum not asking directly whether Alberta should separate, but whether Albertans want to launch a formal process toward a later independence vote. Carney has called it a “dangerous bluff,” drawing comparisons to Brexit, and confirmed his government is reviewing the question’s consistency with the Clarity Act the federal law governing the conditions under which a province may legally pursue separation.
To Art Korpach, a retired vice chairman of a major Canadian bank securities dealer and former Jarislowsky Fellow at the University of Calgary’s Haskayne School of Business, those words and that legal review are not enough. Not nearly.
Korpach, writing in a pointed analysis of the crisis, argues that Ottawa and Central Canada continue to fundamentally misread what is driving separation sentiment in Alberta and that the fashionable explanations circulating in Eastern media and political circles are each, in their own way, a deflection.
The first is that this is Premier Smith’s problem to manage that separatist voices in her caucus and her willingness to permit a referendum are the source of the fire, not the decades of policy grievance that lit it. The second is that Alberta’s own business community is at fault for not speaking loudly enough in favour of national unity. The third is that separation is constitutionally impossible anyway, so the debate is academic. The fourth is that two memorandums of understanding on a West Coast pipeline have resolved the substantive complaints. The fifth deployed with particular frequency is that Alberta would suffer catastrophic economic collapse if it left, with capital and people flooding out of the province.
Korpach disputes each of these.
At the core of Western alienation, he argues, is something more fundamental than a pipeline deal or a constitutional technicality. It is the sense that Alberta’s foundational economic culture built on free markets, entrepreneurship, low regulation, and minimal government interference is in permanent, irreconcilable friction with a Central Canadian model that leans heavily on government protection, oligopoly structures, and bureaucratic oversight.
The oil and gas industry, which remains the backbone of the provincial economy, faces a particular burden. Industrial carbon taxes and mandated capital expenditures on carbon capture projects such as the Pathways Alliance initiative, which carries enormous costs and no near-term revenue place Canadian producers at a structural disadvantage against global competitors who bear no such obligations. The notion, Korpach writes, that international buyers will pay a premium for a “decarbonized” barrel of oil “doesn’t hold water with any knowledgeable party and certainly hasn’t been evident anywhere in the world to date.”
For Alberta to achieve the upstream investment needed to potentially double its oil production over the next decade and a half investments running into the hundreds of billions of dollars the industry needs confidence that its costs will be globally competitive. That confidence, Korpach argues, has not been provided. The two MOUs on the West Coast pipeline, while symbolically significant, address export access. They do not address the cost structure that is quietly strangling investment decisions made in boardrooms today.
There is also a deeper historical wound. Many Albertans, Korpach contends, feel that federal policy still implicitly treats their province as it was treated in 1905 as a territory brought into Confederation to serve the interests of the nation’s eastern core, not as an equal partner within it. That sense of subordination is reinforced every time a federal carbon framework is imposed over provincial objection, every time a regulatory regime is designed in Ottawa with little apparent understanding of what it costs to extract oil from the ground in a competitive global market.
The equalization file sharpens the resentment further. Korpach cites estimates suggesting Alberta’s net transfers to the rest of Canada between 2007 and 2022 amounted to roughly $245 billion with a substantial portion flowing to Quebec, a province that has simultaneously resisted pipelines that would carry Albertan oil.
The conventional answer is yes dramatically. Experts have pointed to Alberta’s landlocked geography, the cost and complexity of negotiating separation, and the likely flight of both capital and population as evidence that independence would be economically ruinous.
Korpach does not dismiss these concerns, but he inverts the question. A separated Alberta, he argues, would gain the freedom to substantially deregulate its economy, restructure its healthcare system without federal constraints, reduce taxes, and fully exploit its natural resources without the web of restrictions that currently govern them. Given that the vast majority of Alberta’s exports flow south to the United States not east through Toronto the province’s economic viability as an independent entity may be more durable than critics allow.
More provocatively, he suggests that the capital flight narrative gets the causality backwards. It is not the uncertainty of separation that is scaring away investment today. It is the uncertainty of carbon taxes, mandatory carbon capture spending, indigenous and regulatory resistance, and the broader question of government intervention. A separate Alberta, freed from those burdens, could in his assessment become the wealthiest per-capita jurisdiction in the world by a considerable margin.
This is the dimension of the debate that receives the least attention in Ottawa and in the national press, and Korpach finds that silence telling.
Canada holds an estimated US$33 trillion in natural resources second only to Saudi Arabia on a per-capita basis, according to Visual Capitalist. But those resources are not evenly distributed. Oil, natural gas, potash, uranium, and critical minerals are concentrated overwhelmingly in Alberta and Saskatchewan. A Canada without Alberta would be a dramatically diminished economic entity, with a weaker GDP trajectory, a strained federal balance sheet, and almost certainly renewed separation conversations in Saskatchewan, British Columbia, and possibly Quebec.
A prominent journalist executive, Korpach notes, put it plainly when asked privately what would happen to Canada if Alberta left: “Canada would crumble.”
Carney himself acknowledged as much when he said Alberta’s role is “essential.” The question is whether that acknowledgment translates into policy, or whether it remains, as so many past gestures toward the West have been, a rhetorical renovation with no structural work behind it.
Korpach’s prescription is direct. Ottawa must stop treating Western grievance as a problem of communication or political management, and begin treating it as a problem of policy. That means acknowledging, plainly and on the record, that Central Canada has historically mistreated the West and committing to structural change.
Specifically, he calls for reducing federal regulation of the oil and gas sector, abandoning the net-zero framework that has generated so many of the industry’s cost burdens, granting provinces greater autonomy over natural resources and healthcare, improving Canada’s tax and fiscal competitiveness to attract foreign investment, and rolling back the accumulation of government influence over individual and commercial freedoms.
These are not small asks. But the alternative, he argues, is not a manageable political inconvenience. It is the slow unravelling of the country.
Conservative Leader Pierre Poilievre, who represents an Alberta riding in the House of Commons, has said he and his caucus will campaign for the province to stay. Whether Albertans will be persuaded depends less on the campaign and more on whether, by October, they believe the country’s institutions are finally prepared to treat them as equal partners rather than convenient contributors.
Korpach’s closing argument is as much a warning as a plea: “With some attention, respect, and good policy change at the federal level, Albertans will choose to remain in Canada.”
The renovation, if it is to be more than metaphor, needs to start now.
