On January 1, 1993, Czechoslovakia ceased to exist. Two peoples who had shared a country for seventy-five years agreed to part ways. They divided the federal debt, split federal assets roughly two-to-one by population, negotiated separate currencies, and went home as Czechs and Slovaks, citizens of two sovereign states. The political decision for separation took about six months. No shots fired and minimal disruptions. A “Velvet Divorce”.

 

The Slovaks did not leave because they hated Czechs. They left because they were tired of being patronized, being told by Prague what was good for them, having their economic concerns dismissed as parochial and pats on the head.

 

I am a proud Canadian. I want to say that at the outset because what follows requires me to take seriously a question that, until recently, serious people refused to take seriously. Recent polling puts Alberta separation sentiment in the high twenty to thirty percent range. A referendum question on separation and a possible vote this fall is on hold pending legal challenges. Notwithstanding, we are – in the judgment of former Alberta Premier Jason Kenney and more than a few other sober observers – one or two black swan events away from numbers that would change the conversation permanently.

 

The instinct for many Canadians – especially in Eastern Canada – is to wave this off as fringe: cranks and malcontents, the usual suspects. That instinct is precisely the problem. Even former NDP Premier Rachel Notley once described Alberta as “the embarrassing cousin no one wants to talk about” – ostensibly about the province’s environmental record, but the framing itself betrays the posture.

 

The Albertans I speak with include tradespeople, investors, professionals, small business owners, teachers and others. Many have had enough. They helped build this country’s most productive economic engine and watched it treated, for generations and particularly over the last 11 years, as a national embarrassment to be managed rather than an asset to be celebrated.

 

Much of that mistreatment has come through the tax and regulatory system. Pipelines cancelled. Bills C-69 and C-48. Emissions caps designed to throttle production. An equalization program where Alberta’s contributions have ballooned. A “just transition” announced without consultation with the workers being transitioned. A carbon tax fight in which Alberta was cast as the villain for objecting to a policy its voters never supported. And underneath all of it, a tone. The condescension. The lecturing.

 

Disrespect corrodes a federation slowly, then suddenly.

 

So, let me put on my tax practitioner’s hat and ask: what would actually happen if Alberta left?

 

The legal architecture exists, but it is not a clean exit ramp. The Clarity Act and the 1998 Reference re Secession of Quebec require a clear question, a clear majority and a duty to negotiate in good faith. A lawful departure would also require a constitutional amendment – likely under the general 7/50 formula, which requires Parliament plus seven provinces representing 50 per cent of the population, though some scholars argue that unanimity would be required.

 

The settle-up would be enormous. Alberta would owe a share of roughly $1.3 trillion in federal net debt – or over $2 trillion in total liabilities, depending on the accounting frame – with the allocation methodology worth tens of billions depending on the formula. Federal assets in Alberta would need to be divided or compensated. The Canada Pension Plan question would force itself to resolution. EI, OAS and GIS would need Alberta replacements. Equalization and federal transfers would stop. Treaty obligations under Treaties 6, 7 and 8 are Crown obligations owed to First Nations as rights-holders, requiring direct negotiation. Crown corporation interests – CMHC, BDC, EDC, CBC – would need to be unwound.

 

Then comes the tax system. Alberta is better positioned than most provinces because it already administers its own corporate income tax. But the Canada Revenue Agency collects personal tax on the province’s behalf. An independent Alberta would need to build its own version.

 

Customs and excise would be entirely new. Federal excise on fuel, tobacco, alcohol and cannabis would need provincial replacements. Most consequentially, Alberta would not inherit Canada’s tax treaties, leaving residents exposed to withholding tax, possible double taxation, and uncertainty about the cross-border recognition of RRSPs and TFSAs for years. An independent Alberta would also need to discuss implementing a consumption tax – a conversation that has been politically toxic for decades.

 

The currency question lurks behind all of it. Keep the Canadian dollar? Peg? Issue an Alberta dollar? Each answer reshapes how taxes are denominated and collected.

 

None of this is an argument for or against separation. It is an argument that the question is real, the architecture is complex, and the country is running out of runway.

 

The Velvet Divorce worked because the Czechs treated Slovak frustration as legitimate. Canada is not Czechoslovakia, and Alberta separation is not inevitable – nor should it be. But preventing it requires acknowledging what the high-twenties polling number represents. It is not a fringe of cranks. It is a substantial minority of serious Albertans who have concluded the relationship has stopped working.  I’m convinced there is also a large group sitting on the fence, waiting to see whether Ottawa can treat Alberta as a partner rather than a problem.

 

The May 15 Implementation Agreement opening a path to West Coast pipeline construction by September 2027 is a meaningful step – but too slow and nowhere near enough.

 

It would also be helpful if the federal government took tax policy seriously as a tool of national reconciliation including advancing the kind of fundamental tax reform championed by Jack Mintz and the C.D. Howe Institute. Tax policy should build a country, not divide it – region against region, rich against poor, entrepreneur against employee.

 

The window is narrower than many people seem to understand. Federations are not held together by habit. They are held together by mutual respect, renewed in each generation – or they come apart.

 

Canada needs renewing now.