'Albexit': Why this economist thinks Alberta could separate from Canada

Transcript

As Albertans take to the streets and the roads to demand better support for the struggling oil and gas sector, one public policy expert says the province could go the way of the Brits.

Jack Mintz, a president's fellow at the University of Calgary's School of Public Policy, wrote in the Financial Post Wednesday that an "Albexit could be the next big shock."

The column comes a day after the federal government pledged more than $1.6 billion in mostly loans to support Alberta's ailing energy sector after the price of crude tumbled to $11 a barrel in late November.

Mintz spoke to As It Happens host Carol Off about what he calls Alberta's "nuclear option." Here is part of their conversation.

Your article that you wrote, published today, it goes into details about what you think is possible, and you talk about all the ways ... you think Alberta could have a Brexit, an Albexit, and stand as its own country. Do you want to describe that for us?

I think Alberta has to, if it's really put to the wall — and I'm not arguing it should do it now — but if it's really put to the wall, I think it could end up being an independent country. You know, separating from Canada with an ability to develop its own trading relations, its own government as it wishes to have.

I'm confused as to how this would actually fix your problems. Because you can have your own national anthem, you can put up your own flag if you want, but it still doesn't put you next to an ocean. You're still going to have to get your oil to tidewater somehow, right? Or get it to other parts of the continent. So how does this help you, separating?

Alberta is being landlocked right now in Canada in the current situation. So what would independence do? Well, it won't necessarily help get pipelines to tidewater in Canada, but certainly, you know, the United States may be quite willing to make deals with Canada for oil.

Really? I mean, you just saw what happened with NAFTA. I mean, really, you think that you can negotiate a better deal with the United States than Canada can?

Yes, I think they could, because Alberta has one card that's really important, which is the energy card. 

They have their own shale oil. They have their own resources. Why would they need to help Alberta get its oil to market?

Right now, there's a lot of heavy oil that's in demand. In fact, markets are quite tight for heavy oil.

So, actually, there would be a real desire to have oil from Alberta. And, in fact, right now the one major competitor is Venezuela, and we know what's happening to that country. 

So why do you have to leave the country in order to get that?

As increased levels of taxation comes in, and if more onerous regulations are imposed on the industry in Canada, Alberta won't be able to attract the kind of investment that is desired. 

In fact, right now, foreign investment has really dried up coming into Alberta, and as a result, the industry has been facing much more dire times, partly because of the lack of investor interest because of the belief that the provinces and the political situation in Canada now has become too risky.

OK, but one of the big issues, and you write about this in the article, is the inability to get your oil to market, to get it out of your landlocked province. So you have enough trouble getting the provinces to help you. You heard Quebec call your product "dirty oil." You know how B.C. feels about this.

How do you think that if you can't get any co-operation when you're part of the federation, how do you think that's going to be trying to negotiate their help when you're a country?

When you're a country you have more control over things, and so you can also bargain differently as well.

Don't forget British Columbia, for example, has pipelines going from B.C. gas fields through Alberta going to the rest of North America. B.C. might be willing to make a deal under very different circumstances. 

You think Canada doesn't want you to develop your resources. Didn't Canada spend $4.5 billion dollars buying a pipeline?

Yes, and they did that because they cornered of themselves in a situation where, you know, they didn't use other means to make sure that that pipeline is going to be built. 

This term Albexit, which I can't decide if it sounds more like a breakfast cereal or something you serve with cheese and capers, are you going to keep with that name?

I thought about Alta-exit as another option, which actually I preferred a little bit more at times, but I was trying to get one that could roll out, you know, in terms of how you want to say it.

You think Albexit rolls off the tongue?

[Laughs] Maybe a bit more than Alta-exit. 

Written by Sheena Goodyear. Interview produced by Jeanne Armstrong. Q&A has been edited for length and clarity.