For more than 100 years, Ontario was the engine that drove Canadian economic growth. When Canada’s social programs were first created – think Medicare, for example – it was Ontario taxpayers that largely paid the federal government’s portion of the bill.
Today, that’s no longer the case.
Alberta has long since surpassed Ontario as the key economic contributor of the Canadian federation. In terms of net contributions to Canada, Alberta has contributed hundreds of billions of dollars more to Ottawa than the province has received back in federal transfers.
But for generations, with perhaps a short pause during the Stephen Harper era, Albertans have been unhappy with the direction of the country.
At almost every turn, federal policies have stymied the growth of Alberta’s oil and gas sector, and the province has long felt ignored in federal politics and decision-making.
All of this culminated in the Justin Trudeau era with the “nine bad laws” that Alberta Premier Danielle Smith constantly talks about, most of which were designed to hamstring the development of Alberta’s natural resources. Some of these laws have since been reversed or somewhat changed under Prime Minister Mark Carney, but the lingering resentment of Trudeau’s approach to Alberta has led to the emergence of a genuine separatist movement.
To get in front of the issue, Smith has decided to hold a referendum this fall asking Albertans whether a formal referendum process should be triggered to consider leaving the Canadian federation. Outside of Alberta, most Canadians aren’t paying too much attention. After all the polls and pundits seems to suggest that the “leave” side will be heavily defeated, meaning a return to the status quo come October.
But it would be a mistake for Canadians outside Alberta to ignore the province’s grievances or at least fail to consider just how much Alberta contributes to the federation, and just how much economic pain the rest of the nation would have to go through should Alberta one day leave Canada.
Authors Tegan Hill and Nathaniel Li from the Fraser Institute did a study recently to consider just how much Canadians outside of Alberta are benefitting from the province’s net contribution to the federation.
In 2024 alone, for example, Alberta sent $24.5 billion more to Ottawa in tax revenue than the province got back in terms of federal spending.
How about over a longer period? In the 20-year span between 2007 and 2026, Hill and Li estimate that Alberta’s net contribution to the Canadian federation was $321.9 billion, nearly four times that of British Columbia and five times that of Ontario. Canada’s other seven provinces, by contrast, were net recipients, meaning Ottawa spends or transfers more money to those provinces than what it collects.
If Alberta had not been a part of Canada over that 20-year span, taxpayers in Canada’s other provinces would have had to contribute roughly an extra $1,000 a year in taxes simply to keep federal spending at its existing levels. In other words, each and every Canadian outside of Alberta enjoys a tax bill $1,000 a year lower than it would otherwise be if Alberta wasn’t part of the Canadian federation.
That’s worth considering as Albertans ponder their province’s fate later this year. Most Albertans who sympathize with the separatist cause don’t necessarily want to leave Canada. They are simply tired of Ottawa imposing laws that damage Alberta’s economy and its ability to grow, while the rest of Canada at the same time enjoys a massive influx of cash from the province.
The Carney government has been negotiating with the Smith government to undo some of the unpopular Trudeau era laws and even to feasibly (with many conditions attached) see a new pipeline get developed to bring Alberta oil to B.C.’s west coast, something Smith has long wished for. Given the sheer fiscal impact of Alberta’s contributions to Canada, the federal government should absolutely be prioritizing policies that help the province grow and ensure that its major industries, including oil and gas, thrive.
Canadians outside of Alberta, including those of us here in Ontario, would be wrong to simply dismiss this fall’s referendum, even if the idea of separation gets rejected overwhelmingly. It’s time for Canadians living in other provinces, along with the federal government, to stop taking Alberta for granted. Alberta is by far the largest fiscal contributor to the federation, ensuring our social programs remain intact and that taxes stay at current levels, and Canadians should want the federal government to pursue policies that help Alberta succeed, not hold the province back.
Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center. He previously served as the Ontario Director at the Canadian Taxpayers Federation and a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
