The Montreal Economic Institute calls for a Quebec-Alberta dialogue

Montreal, May 12th 2011 – The Montreal Economic Institute (MEI) today unveils a Research Paper, A Plea for a Quebec-Alberta Dialogue, that analyzes the political and economic relationship between two provinces that have several interests in common. For the authors Michel Kelly-Gagnon, Germain Belzile and Youri Chassin, the goal of the study is to improve our understanding of the situation and to supply a factual basis for discussion, challenging the accepted wisdom and the sometimes distorted perceptions that have coloured relations between Quebec and Alberta.

"Alberta and Quebec have the opportunity to advance causes that are in their respective interests by joining forces rather than facing off against each other. In 1988, it is thanks to the alliance of these two provinces that the Free Trade Agreement was able to see the light of day and mark a turning point in history. It is mostly a lack of understanding of each other’s political culture that explains their limited collaboration despite great potential, which is why we decided to launch a Quebec-Alberta dialogue," explains Mr. Kelly Gagnon.

Alberta’s prosperity benefits Quebec and is not the cause of a decrease in manufacturing employment

"The view that Alberta’s prosperity, which derives in part from oil sands mining, impoverishes the province of Quebec has no basis in economic fact. Indeed, manufacturing employment has been declining for several decades in all developed countries, whether oil is found there or not," declares Mr. Belzile. In Europe, where with certain exceptions sources of oil are of marginal importance, manufacturing jobs fell from 24% to 15% as a proportion of total employment from 1992 to 2009. Therefore, the decrease observed in Quebec follows the same trend.

Quebec and Alberta, two energy powerhouses

As the International Energy Agency predicts, world energy consumption is going to keep on rising. Even if governments were to put in place very aggressive policies to limit consumption, the International Energy Agency predicts that demand will nonetheless jump 36% by the year 2035. Quebec alone is the fourth largest producer of hydroelectricity, after China, Brazil and the United States. For its part, Alberta possesses the largest oil reserves in the world after Saudi Arabia. "Although faced with respective challenges that are quite different, Quebec and Alberta must both make sure to preserve access to the highly regulated American market," explains Mr. Chassin.

He also explains that the oil market is globalized. Whatever reduces world oil production raises its price, in Quebec as elsewhere. "So even if Quebec imports no oil directly from Alberta, a reduction in Alberta’s oil production would ultimately contribute to a hike in what Quebecers pay for gas at the pump," he continues.

The Research Paper entitled A Plea for a Quebec-Alberta Dialogue, prepared by Michel Kelly-Gagnon, president and CEO of the MEI, Germain Belzile, director of research for the MEI, and Youri Chassin, economist at the MEI, can be consulted free of charge on our website.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its publications, media appearances and conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms. It does not accept any government funding.

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