Executive Summary

Strip away the politics of independence and a practical question remains. If Alberta kept the taxes its people and businesses already pay to Ottawa, and paid in return for everything Ottawa now does for Albertans — pensions, defence, borders, courts, immigration, all of it — could Alberta afford to run itself?

Not whether it should. Whether it could, and with how much room to spare. Every figure here describes a normal year once the transition to independence is complete, in today’s dollars, measured against the Government of Alberta’s 2026-27 budget.

The answer is yes, and not narrowly. After paying for every service Albertans receive today and every federal function that would become Alberta’s, between C$22.2 billion and C$32.1 billion is left over each year — that equates to every Albertan being better off by C$4,390 to C$6,350, every year.

Sources and derivation: [AB-B26][SC-450][FI-26][BA]. Federal revenue lines are 2024, the most recent full year published; Alberta spending lines are Budget 2026-27. Canada does not publish a single directly measured account of all federal revenues attributable to each province, so provincial totals require estimation and allocation; two independent estimates are used and both are shown. The low column pairs the lower revenue estimate with the higher end of the sovereign-function cost range and the high column does the reverse, so the two are a conservative and a favourable case rather than two revenue estimates alone. Components are rounded independently and may not sum exactly to the totals shown. Section 1 explains how the ledger is built.

What it means for a household

One possible use of the surplus balance is tax reduction, and this paper tests two illustrative programmes rather than one. The smaller, in Table 11, cuts personal income tax revenue by about a third and brings corporate tax to about 19 per cent, at C$17.0 billion to C$22.2 billion a year. The larger cuts personal income tax roughly in half on the same corporate rate, at C$24.0 billion to C$31.1 billion a year — more than the conservative balance would cover, which is why it is shown to establish scale rather than offered as a promise. Under that larger programme single earners of income of C$60,000 would keep about C$4,200 more a year than they do today; a couple with C$125,000 of income would keep about C$9,800 more than today; a family with an income of C$165,000 would be better off by about C$12,600; and a single parent earning C$85,000 would be further ahead by about C$7,700 — reductions of 45 to 55 per cent in the income tax those households actually pay today, permanently rather than as a one-off rebate.

What if the transition goes wrong

Seven severe shocks are tested, each set at the worst end of its range. Four are what independence itself brings: the federal debt share at full population cost, an Indigenous settlement well above continuation, a contraction in the corporate tax base beyond the Quebec relocation benchmark set out in Appendix K, and the higher interest a new country pays to borrow. Together they cost C$13.5 billion a year, and the government revenues still can pay all of it while running a surplus of C$8.7 billion to C$18.6 billion.

The other three are the commodity cycle — household income, oil and consumption all falling to the worst levels in Alberta’s recorded experience. That is one downturn hitting three revenue lines, and it arrives whether or not Alberta is independent: the four Alberta downturns identified in Appendix K all reversed. Separately, the pension transfer is disputed and is not in Alberta’s gift: if none occurred on the assumed terms, Canada Pension Plan benefits remain portable and Alberta would carry about C$2.1 billion a year of Old Age Security and Guaranteed Income Supplement from general revenue, which the balance above absorbs. Section 6 models the fund on a C$100 billion transfer as well as the C$167 billion used in the headline.

Each of the seven shocks tested, the evidence behind it and the full arithmetic are set out in Section 4 and Appendix K.

Why the base case is conservative

Where a material judgement is uncertain, the model adopts the more conservative assumption. Nothing is counted for growth from lower taxes, for investment returning under a steadier regime, or for better market access. Nothing for building modern systems once instead of inheriting old ones, for federal land and buildings in Alberta, or for anything the Heritage Fund earns. Nor for Alberta’s own first-quarter 2026-27 update, which raised forecast resource revenue by about C$9.7 billion — an exclusion larger, on its own, than the worst shortfall anywhere in this paper. Each of the omissions listed here would improve the result, not worsen it.

Twenty years on

Part V models 2046 across eighteen combinations of production, price and spending discipline. They run from an annual surplus of C$44 billion to C$167 billion, and every one of them clears Alberta’s position today. The weakest comes from the most cautious growth case, at the lower oil price, with spending rising as fast as the whole economy — no boom, simply Alberta carrying on as it is, and still producing roughly twice the current conservative surplus.

None of this says independence would be easy. Under the assumptions and stress cases modelled here, on money Alberta already raises, Alberta pays its way — leaving substantial room for choices among lower taxes, accelerated debt retirement and larger Heritage Fund contributions.