Uncertainty over Alberta separation comes at ‘exactly the wrong time’: business group

Uncertainty for businesses in Alberta, among other headwinds, is the reality some are warning of after a possible vote on splitting from Canada was announced earlier in the week.

Calgary-based fintech company Helcim is among the many tech companies that have been making Calgary one of the fastest-growing tech hubs in North America, due in part to the city’s livability.

But separatist talk in the province is threatening the city’s success.

“We were talking with an investor, last week or the week before, mid-west American, and they even had heard this referendum conversation,” said Marjorie Junio-Read, Helcim’s chief financial officer.

“Helcim is a payments company; we move money. We move money throughout Alberta, Canada and the U.S. What does that look like in a post-world that becomes very, very challenging?”

Premier Danielle Smith said in a televised address late Thursday that the Oct. 19 referendum will include a question on whether Alberta should remain in Canada or if the province should hold a binding referendum on separation. Nine other questions announced in February deal with immigration and constitutional matters. 

Smith’s announcement came as the war in the Middle East continues to upend the global energy market and Canada looks to push forward the infrastructure needed to get more of its oil and gas to customers clamouring for a stable supply.

The referendum news also came one week after Smith and Prime Minister Mark Carney resolved one of the last remaining sticking points in the energy accord they signed late last year: an agreement on how to implement an increase in the industrial carbon price. The memorandum of understanding lays out conditions that could see a new Alberta-to-West Coast pipeline built to enable more bitumen exports to Asia. 

“Now we’ve added our own variable of uncertainty of our own making to what’s already going on in the world, that we have no control over, that’s the problem, it’s not necessary,” said Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce.

The referendum question is a self-inflicted wound, the mayors of Alberta’s two largest cities are warning of, as they now make the case why Alberta should remain in Canada instead of what they say should be the time spent on other issues that matter to their residents.

“This is a BS referendum question to begin with,” said Calgary Mayor Jeremy Farkas. “Going through not just one vote, but potentially multiple votes on separation, it telegraphs to the rest of the world, to the rest of the country that we are not serious.”

“This referendum on a referendum actually creates hardship for Edmontonians,” said Edmonton Mayor Andrew Knack. “Even yesterday, I had a chat with a large employer who had to spend time reassuring me that this is still the right place to invest in.”

But despite the environment, companies like Helcim are still making the business case for the province.

“We talk every day about how fantastic it is to grow a business in Alberta, and we will continue to be huge advocates of that because that’s how much we believe in growing a tech company here in Calgary and Alberta,” Junio-Read said.

In response to concerns that the referendum will cause economic uncertainty, Smith pointed the finger at Justin Trudeau, saying policies under his tenure repelled investment within the province’s energy sector, which she says has led to separatist sentiment.

“We do not want things lingering around for one or two or three or five years, creating that level of uncertainty people know in Oct. 19 there’s a choice to be made,” she said.

However, more ambiguity means investment dollars stay on the sidelines, projects get more expensive, and delays become more likely, said Yedlin.

“At this moment in time, we don’t have that luxury,” she said. “Uncertainty is the enemy of investment, and we’re now introduced to new elements of uncertainty.”

Candace Laing, head of the Canadian Chamber of Commerce, said the country has already been contending with economic costs beyond its control while also recognizing the need to remove self-imposed barriers.

“Prolonged uncertainty around constitutional or political separation brings real risks for investor confidence, economic growth and Canada’s global competitiveness at exactly the wrong time,” she said. 

“There are legitimate concerns being raised in Alberta around competitiveness, market access and economic opportunity. Canada’s democratic system is strong enough to address those concerns constructively while continuing to build a stronger, more competitive national economy together.” 

The Business Council of Alberta agreed that valid grievances are being voiced in the province, but said separation is not the solution. In a statement, the council said last week’s carbon price agreement shows what’s possible when the provincial and federal governments work together. 

“It is an example of a shift by the federal government to recognize Alberta’s importance and unique contributions to the federation. We commend Premier Danielle Smith’s work with Prime Minister Carney to advance a fairer deal for Alberta,” it said.

But the business council said there is more to be done to make the federal-provincial relationship more fair, such as reforming the equalization program and giving provinces more of a say over immigration. 

ATCO Ltd. chief executive Nancy Southern has been one of the few Alberta business leaders to speak out in favour of Alberta staying within Canada. 

She told reporters after the company’s annual general meeting last week that Albertans should take lessons from the Brexit vote a decade ago, which led to the United Kingdom’s departure from the European Union. 

“It has not been a good situation for Great Britain,” she said. 

“It’s in my heart and soul to be a proud Canadian as well as a proud Albertan. I don’t believe this discussion should have gone as far as it has.”