Saturday, February 2, 2019

Alberta: Our 51st state? - By Peter Skurkiss

Alberta as our 51st state is not as far-fetched as it sounds at first blush.  The idea was written about by Peter Zeihan in Accidental Superpower (2014) and recently broached by Holman Jenkins, Jr. in no less than the Wall Street Journal.  Before diving into the politics and practicality of a Alberta leaving Canada, let's first review some background to see why such a traumatic event could even be considered. 
Unlike the U.S., which is netted together with the world's best river system and a favorable geography and climate, Canada is the opposite.  Zeihan shows that three barriers split Canada into five largely autonomous regions.  They are the Rocky Mountains, the Canadian Shield, and the St. Lawrence River. He says:
Geographically, Canada just isn't a unified entity, and that's without even considering its more publicly discussed challenges such as the Anglophone-Francophone divide or the country's  confederal political system, or that because of cold climate most of the Canadian landmass is simply too inhospitable to support a large population, condemning everyone to live on the country's extreme southern fringe.
This makes Canada inherently unstable and unwieldy from both a political and a geographic point of view. 
In two significant ways, Alberta is unlike the rest of Canada.  First, Alberta is energy-rich.  Thanks to a several-decade-old energy boom, Alberta has a high per capita income.  This results in the central government in Ottawa sucking taxes out of Alberta.  For every dollar Alberta sends to Ottawa, it gets back only about 65 cents in return.  This means that Albertans pay $21.8 billion more in taxesthan they get back.  And it is the aging population of Quebec that benefits the most from this income transfer. 
To make matters worse, neighboring provinces have blocked landlocked Alberta from building pipelines for its oil and gas.  As for the Trudeau central government, like all progressive administrations, it is enthralled with the green movement and is anti-fossil fuel in all forms.  Jenkins writes that this means that Alberta oil has to be shipped to markets by truck or rail, an expensive proposition either way, causing Edmonton's oil to sell at barely $10 a barrel – an 80% discount to world prices.  Having to subsidize the rest of Canada while at the same time other Canadians try to squelch the province's energy industry has rankled many Albertans.
The second factor separating Alberta from the rest of Canada is its demographics.  Quoting Zeihan:
Alberta's population is getting younger, more highly skilled and better-paid.  As the demographic and financial disconnect between Alberta and the rest of Canada grows, these younger, more highly skilled, and better-paid Albertans will be forced to pay ever higher volumes of taxes to Ottawa to compensate for increasingly older, less skilled, and lower income Canadians elsewhere in the country.
The core issue is pretty simple.  While Quebecois – and to a slightly lesser degree the rest of Canada – now need Alberta to maintain their standard of living, the Albertans now need not to be part of Canada in order to maintain theirs.
Landlocked as it is, Alberta could not make it as an independent country.  But joining the Union has many advantages, such as alleviating much of Alberta's labor shortages in technical areas, privileged access to the U.S. market and transportation system, unlimited access to the American capital market, and inclusion in the U.S. currency zone.
Why would the U.S. entertain the entry of Alberta into the union?  Economics.  Unlike, say, Puerto Rico, which is (and will continue to be) a welfare state and where Spanish is the native language, Alberta is vibrant, wealthy in energy, and English-speaking.  Culturally, Alberta is more in sync with America than is Puerto Rico.  As a state, Zeihan claims that Alberta would be per capita the richest.  Some will say Democrats would object to adding a "white" state to the Union.  Yes, but this knee-jerk racism of the Democrats could be placated by the prospect of having more tax revenue flow into Washington. 
As Jenkins notes, the Civil War (1861-1865) made secession illegal in the U.S.  But Canada is more mannerly.  Its courts have ruled that Canadian provinces have a full legal right to hold independence referenda.  When the question of Quebec's secession was on the front burner, the Canadian Supreme Court in 1998 decided unanimously in favor of the legality of secession.  Then, in 2000, the Canadian parliament passed a "Clarity Act" to lay out the political process of implementing secession.
The legal framework is in place for secession if a Canadian province chooses to go that route thanks to French-speaking Quebec.
Right now, the secession of Alberta from Canada seems unimaginable.  But then again, in 2016, who thought the builder of glitzy casinos in Atlantic City and a reality TV show personality would be elected to the most powerful position in the world with zero political experience?  Many of the fundamentals for an Alberta secession are in place.  All that is needed is a precipitating event or two.  Black swans happen.  When they do, people, after getting over the initial shock, slap their foreheads and say, "Of course. We should have seen it coming."