United Conservative Party Leader and Premier Danielle Smith celebrates her win in a by-election in Medicine Hat, Alta., Nov. 8.Jeff McIntosh/The Canadian Press
Imagine you’re Alberta.
You’re wealthy. You’re successful. You’ve grown quite used to both. Your current generation was born on third base and assumed it hit a triple.
And now, you feel that your good fortune is threatened. You feel more vulnerable than you have in a generation. You have felt the harsh sting of bad times, and you don’t want to feel it again.
So what do you do?
Apparently, you pick a constitutional fight with Ottawa. One that has the potential to do more harm than good for a provincial economy that, despite all the bluster, is not in crisis.
The text of the Alberta Sovereignty Within a United Canada Act never once mentions the words “economy” or “economic.” Yet this law – championed by newly anointed Premier Danielle Smith, passed by her United Conservative Party government last week – is grounded in economic fear. And a desire by populist political forces to direct that fear at an enemy against which to rally the voters: Ottawa.
Sure, the preamble of the legislation talks about defending Albertans’ “unique culture and shared identity” – a very intentional echo of the language that Quebec embraced long ago to defend and extend its constitutional territory. But Alberta is not Quebec. The only meaningful distinctions between Alberta and the rest of the country are economically rooted.
And while the province’s leadership might muse about the application of the law to, say, defend Albertans’ rights to gun ownership (or bizarrely, from Ms. Smith over the weekend, plastic-straw use), the Premier made it clear upon introducing the legislation that what really concerns her is protecting the means of Alberta’s economic success.
The act “will be used as a constitutional shield to protect Albertans from federal overreach that is costing Alberta’s economy billions of dollars each year in lost investment, and is costing Alberta families untold jobs and opportunities,” Ms. Smith said in a statement.
But, frankly, Alberta’s economic success remains very much intact.
The province’s gross domestic product growth is among the highest in the country in 2022, and likely will be again in 2023, according to economists’ forecasts. Its rate of employment growth leads all provinces this year. It boasts the highest average weekly wages in the land, nearly 7 per cent above the national mean.
The province’s recent fiscal update showed the government on track for a whopping $12-billion surplus in 2022-2023 – a bigger pool of black ink than at any time during its boom years. Capital spending in the oil and gas sector – a key metric of investment in the province – is on track to have increased by more than 50 per cent this year, exceeding the levels that prevailed before the COVID-19 pandemic.
In short, this does not look like a province in the throes of economic disaster. Yes, it’s still susceptible to ups and downs, and still highly exposed to the fortunes of global energy markets. But the chosen political remedy – to throw the province’s legal and financial relationship with its federal government into uncertainty – is considerably out of step with its economic realities.
It’s questionable just how much support there is among Albertans for Ms. Smith’s constitution-rattling legislation. A recent Leger-Postmedia poll found that fewer than one-third of Albertans see the sovereignty act as “necessary to stand up for Alberta against the federal government.” Even among decided UCP supporters, only 58 per cent agreed with that statement.
Still, when you sit down and talk with Albertans, it quickly becomes evident that the “Trudeau wants to destroy us” sentiment is real, and strong. (It’s a close race with “Trudeau is an idiot.”) The view that Alberta’s economic future is under threat – and that federal policies play a leading role in that – is not confined to the political fringes.
And a common defence of the province’s tactics is, “Yeah, well, Quebec’s been doing it for years.” As if emulating the country’s constitutional problem child is a good idea. From an economic perspective, it most certainly is not.
Quebec’s per-capital gross domestic product in 2021 was 13 per cent below the rest of the country (Alberta’s was 33 per cent above the rest of Canada). Average weekly wages in Quebec are 13 per cent lower than those in Alberta. On a per-capita basis, Quebec’s provincial tax take is nearly double that of Alberta’s.
While, obviously, Alberta’s oil and gas wealth plays a significant role in those differences, the reality is that Quebec’s provincial economy has been a chronic underperformer among Canadian provinces. There’s little question that Quebec’s historical stance as a constitutional malcontent has been a significant contributor.
The province spent decades immersed in uncertainty, which translated into increased political risk for businesses operating and investing there. It threw up barriers to investment from outside its borders. It insisted on having its own provincial agencies, separate from existing federal services, which have increased government costs and created extra layers of red tape.
The result has been decades of under-investment and heavy taxation, which have left Quebec’s economy starved of the capital necessary to generate growth.
Perhaps some Quebeckers would argue that it was a reasonable price to pay to defend a language and culture. But if your goal is to defend an economy – as Alberta’s is – the lesson from Quebec is that this is not the path to take. The costs of pushing your constitutional boundaries are high.