This story is Part 4 of the Road to the Referendum series.
Part 1 on regular folks for and against separation can be found here. Part 2 about the border city of Lloydminster can be found here. Part 3 about the impact to First Nations can be found here. More on what to expect from the series can be found here.
In the weeks and months before Albertans found out they would be voting on whether to remain in Canada or start the process on a referendum to leave — a small chorus of business and political leaders began sounding the alarm.
Calgary Mayor Jeromy Farkas officially joined that chorus back in April while delivering an address at this year’s report to the community, hosted by Calgary Economic Development.
“I want to talk about why Canada still matters,” Farkas said to an applause at the beginning of his speech.
The event focused on expanding Calgary’s economy and its global reach; one Farkas said would be greatly impacted if Alberta chose independence.
Although the mayor told the business crowd the frustrations felt by those wanting to separate are real, he warned of economic consequences including “capital flight, weakened investor confidence, and years of instability.”
“Independence would mean turning our backs on the very partnerships that have helped make Alberta such a success.”
At that time, organizers with separatist group Stay Free Alberta were still gathering signatures to force a separation question on the ballot during the fall referendum on Oct. 19.
However, a survey from the Alberta Chambers of Commerce showed more than half of respondents felt even the discourse alone was having a negative impact on the provincial economy.
Calgary Economic Development CEO Brad Parry was asked if the separatist sentiment was having an impact on investment.
“Have we seen decisions being paused? Absolutely. Have we need them be stopped? No,” he told reporters after the April event. “Our point of view is simple: we still have the best business environment in Canada, if not North America.”
Proponents of an independent Alberta have suggested that seceding would come with a prosperous future for Albertans, due in part to the elimination of federal policies they feel are causing economic stagnation in the province.
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The Alberta Prosperity Project (APP) argues the province would be richer if it wasn’t required to pay billions of dollars in equalization and federal taxes. A document published by the APP suggests that could result in a $45 billion surplus.
It claims sovereignty would allow Alberta to tailor its fiscal and taxation policies “specifically to its economic conditions,” which could result in deep tax cuts due to increased control over energy and natural resource policies.
The group expects oil and gas production in an independent Alberta would increase enough to boost direct revenue by more than 130 per cent by 2045.
It also promises improved or maintained levels for government services with a new five per cent sales tax.
All claims one business leader suggests are “one-sided, back of the envelope math.”
“(Alberta) would be the 125th largest country, from an economic standpoint, in the world,” said Calgary Chamber of Commerce president Deborah Yedlin.
“No diversification of risk, no ability to share costs, we would have to deal from everything from defence, to currency, to passports, to diplomatic services that you would have to develop all over the world.”
The referendum on Oct. 19 will include a question on whether Alberta should remain in Canada or if the province should begin the process to hold a binding referendum on separating from the country.
It comes after Alberta and the federal government reach an energy deal that could have a new pipeline to the west coast approved by Sept. 2027.
The Alberta government plans to submit an application to the Major Projects Office by July 1; however, the pitched pipeline is still without a private sector proponent.
Richard Masson, the former CEO of the Alberta Petroleum Marketing Commission, said the separation debate comes at a time when there is demand for Canadian oil and gas, with the route for a potential pipeline planned through British Columbia.
“There, we end up shooting ourselves in the foot, in my opinion,” he told Global News.
“We need to work with B.C., with Canada, with Indigenous groups, to develop lasting partnerships.”
Last week, Edmonton Mayor Andrew Knack weighed into the economic debate. Knack said he’s already fielding questions from the business community about whether they should invest in Edmonton, amid the discussions around Alberta independence.
“It harms our ability to attract economic investment, which in turn affects municipalities financial sustainability, which in turn affects peoples’ property taxes,” he said.
Trevor Tombe, an economist with the University of Calgary, said it’s challenging to quantify the impact the separation sentiment is having on the provincial economy.
The situation has, however, added another layer of economic uncertainty — similar to when trade relations soured between the United States and Canada, he said.
“If you look at sectors that are heavily dependent on the U.S. market for their output, those sectors saw reductions in their employment —far greater than sectors that are not tied to the United States,” he said.
“If the same kind of uncertainty of the exact same size affects Alberta, it could add up to approximately 50,000 fewer Albertans being employed.”
Tombe pointed to history to predict potential impacts of a separation referendum, including past votes in Quebec as well as Brexit in the United Kingdom, which he said saw a reduction of investment of up to 18 per cent after the U.K. pulled out of the European Union.
“Any kind of move to make migration or trade more difficult, which it naturally would be were separation to occur because it makes regulations more different from one location to another, would have the same kind of an effect,” he said. “It might take time to try and put a precise number on that.”
Looking ahead, experts suggest they’ll be watching to see the margin of Oct. 19’s vote on Alberta’s place in Canada — which either has the potential to put the issue to bed or create further uncertainty with a narrow vote.
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