The Seperation Effect on Labour Markets – Part One – Labour Supply

To: Alberta referendum voters  

From: Joseph Marchand  

Date: September 18, 2026  

Re: The Seperation Effect on Labour Markets – Part One – Labour Supply

This Memo is part of a series the C.D. Howe Institute is presenting to better inform the public about the policy issues and complexities of the potential separation of Alberta, and its consequences on Albertans, businesses, and the rest of Canada. Today: Labour supply. 

Alberta celebrated its 121st birthday as a Canadian province on September 1, and Canada officially recognized Labour Day for the 133rd time on September 7.  Thus, this September would seem to be a most fitting time to openly think through the possibilities of the labour market effects of an autonomous Alberta, as the separation vote nears. 

To think through the possibilities of separation, consider a simple theoretical picture of a single Alberta labour market. In two dimensions, employed people increase from left to right, while earned pay increases from down to up. Workers represent a positive-sloped labour supply line, where more people want to be employed as pay increases. Employers represent a negative-sloped labour demand line, where more organizations want to employ more people as pay decreases. Equilibrium employment and pay are found where the two lines cross. 

 So, what might happen to workers and employers in Alberta’s labour market if it separates from Canada? Various shifts to workers’ labour supply and employers’ labour demand may occur. Each shift might push employment and pay, up or down, depending on the shift’s direction along the other line. When multiple shifts occur simultaneously, the magnitude of each shift will matter. To begin, keep in mind that roughly 2.7 million people are employed (out of a total population of around 5 million), with an average pay of around $1,400 per week across all industries.  

Let us first consider how workers may react to Alberta’s separation from Canada. Albertans who support separation from Canada will no doubt remain in Alberta and continue to supply their labour as they did before, with the labour market unchanged. However, Albertans who do not support this separation may want to instead remain in Canada and could possibly leave Alberta, withdrawing the labour they previously supplied. This shift would reduce Alberta’s employment but increase its pay. 

According to a recent Leger survey, 39 percent of Albertans would continue to live in a new independent country of Alberta, while 38 percent would move elsewhere in Canada and 2 percent would move to a different country, with 21 percent uncertain. 

If these numbers materialized after separation, and that is a big “if”, the leavers could lead to a reduction of roughly 2 million of Alberta’s 5 million people, with the stayers and the uncertain as the remaining 3 million. Assuming the initial 2.7 million employed were evenly split between stayers and leavers, those leavers would reduce Alberta’s employment by roughly 1 million. 

Of course, after considering who might leave Alberta following separation, we must also consider who might move to a post-separation Alberta. Alberta has had a long history of attracting migrants from elsewhere in Canada, as well as from outside of Canada. Would that long history continue following separation? If it did, that could lead to a rightward shift in labour supply, and that could undo the leftward shift of movers, either partially or completely, which would increase Alberta’s employment but decrease its pay. 

According to that same Leger survey, 10 percent of Canadians would consider moving to an independent Alberta. With a current population of 36 million Canadians outside of Alberta, this might mean an inflow to Alberta of around 3.6 million people. This rightward shift in labour supply would be more than enough to counteract the leftward shift from the leavers. Taken together, the leaving Albertans and inflow of other Canadians could increase Alberta’s population from 5 million to 6.6 million, and its initial employment from 2.7 million to roughly 3.6 million. In reality, polling results such as these can produce inaccurate estimations of actual behaviour. Further, people often greatly overestimate their willingness to move under any circumstances. According to the 2021 census, the mobility rate between provinces was only around 3 percent. Therefore, in the short run, it is very possible that no one or perhaps only a few people move immediately, so these possible movements of leavers and other Canadians would likely take time and only fully occur in the long run. And, this scenario did not even consider continued or new inflows of immigrants from countries other than Canada.  

Let’s remember  that Alberta’s provincial borders would become international borders following separation. So, any inflows into Alberta, from elsewhere in Canada or otherwise, would now technically both become international immigration. And, while separation is the 10th referendum question, the first five questions deal directly with immigration issues. Depending on how Albertans vote, this could lead to tighter immigration policies, further restricting the inward flows of people and reducing any additional labour supply, both initially and over time. 

This discussion of the possible labour supply shifts above assumes that, while people were considering moving in and out of Alberta, the employers in Alberta would remain the same. That is not likely to be the case. Indeed, potential employer movements could be even more important, or more significant, than worker movements in the case of a provincial separation, affecting labour demand. Tomorrow, we’ll take up that question of possible labour demand shifts from separation. 

Joseph Marchand, Founding Director of the Alberta Centre for Labour Market Research and Professor of Economics at the University of Alberta. 

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The views expressed here are those of the author. The C.D. Howe Institute does not take corporate positions on policy matters.