Does Alberta Have the Energy to Leave Canada?

Rumblings of Western Canadian sovereignty are once again being heard.

Recent polling from Angus Reid suggests that 36% of Albertans and 34% of Saskatchewanians support the idea of leaving Canada. Thankfully, 60% and 58%, respectively, still prefer to remain within the federation. Even so, this tension could easily escalate depending on Ottawa’s next move.

Of course, this isn’t Canada’s first rodeo with provincial referendums. In 1980, René Lévesque led 40.4% of Quebecers to vote for sovereignty. In 1995, the separatist movement came within a whisker of victory, with 49.4% voting to leave. In the month leading up to that referendum, the Toronto Stock Exchange dropped 3.3%, while the Canadian dollar slid 2.6%—a clear indication of the financial uncertainty that accompanies threats to national unity.

Following that close call, Ottawa introduced a range of measures aimed at improving Quebec’s relationship with the rest of Canada. Still, many believe that had Prime Minister Jean Chretien stepped in earlier, the results might have been far less divisive.

This time, we expect the federal government to respond before tensions escalate. Alberta’s grievances are rooted less in identity and more in economics: pipelines that aren’t being built, regulatory roadblocks that hinder development, and a growing sense that Ottawa is more obstacle than ally.

Clearing the way for infrastructure investment and easing regulatory bottlenecks would go a long way toward defusing separatist sentiment in the West.

After years of investor disinterest, we see renewed opportunity for companies with exposure to Western Canada. Our clients already hold shares in several of them, and we anticipate positive tailwinds ahead.

Ultimately, Alberta’s drive to separate from Canada will hinge on Ottawa’s next moves. If the federal government listens—and responds—another unity crisis can be avoided. But if it turns a deaf ear, the pressure will only intensify.

-written by Jeff Pollock