‘Not theirs to offer’: Danielle Smith slams separatists’ U.S. royalty pitch — what Albertans have riding on it

With Albertans heading to the polls on Oct. 19, the bigger question for households isn’t what was or wasn’t said. It’s what sovereignty, and the uncertainty around it, could mean for mortgage payments, pension cheques and take-home pay.

What did separatists reportedly offer the U.S.?

According to a Globe and Mail investigation, Denis Modry — co-founder of the pro-independence advocacy group Alberta Prosperity Project (APP) — said the group gave U.S. State Department officials a document outlining the benefits of Alberta sovereignty. That document included possible oil royalties and fresh water access. APP met with U.S. officials three times in 2025.

Jeff Rath, a lawyer for the group, denied that the resource proposals were discussed.

During a recent news conference, Premier Danielle Smith, who has said she’ll vote to stay in Canada, said “it’s absurd that anybody would offer something like that up that’s not theirs to offer.”

She added: “It’s a decision that Albertans would make, and I don’t think Albertans would support it.”

Why do Alberta’s oil royalties matter to your household budget?

Royalties are the province’s share of the value of oil and gas pulled from public land, meaning they’re public money. Alberta now expects to collect roughly $23 billion in non-renewable resource revenue in 2026-27, or 27% of total revenue, according to the Government of Alberta’s latest revenue forecast. That’s $9.7 billion more than it projected in February, thanks to higher oil prices.

Not only do the volatile prices show how tentative these funds can be for Albertans, but committing any share of it to another country will reduce the cushion left for public services, while putting more pressure on taxes to fill the gap.

Would separation make borrowing more expensive?

The most detailed estimates come from a report by the University of Calgary’s School of Public Policy — a non-partisan research institute — commissioned by the Alberta government. It models both a “smooth” separation and a “difficult” one.

In the smooth scenario, the authors expect borrowing costs will increase in the short term. Canadian loan rates are anchored to Ottawa’s top credit rating, while Alberta currently pays about 45 basis points more on its debt. For example, if a current Canadian province were to borrow money at an interest rate of 3.5%, then a separated Alberta would pay 3.95%. That difference can be significant:

• On $1 billion in debt, an additional 0.45 percentage points costs $4.5 million more in interest annually
• On $10 billion in debt, that’s $45 million more annually

It’s not just government debt that is impacted. Loans in an independent Alberta would be priced off that higher rate, which would affect lines of credit, car loans and mortgages for households and businesses alike. For example, an extra 0.45 percentage points on a $500,000 mortgage balance works out to roughly $2,250 in added interest a year.

In the difficult scenario, Alberta would have neither the Government of Canada nor the Bank of Canada standing behind it. Its credit rating would drop sharply, pushing up the interest rate it pays on its debt and, in turn, the rates households and businesses pay, which would weigh on consumption and investment. The risk would be greatest if oil prices fell, since international investors would worry about Alberta’s ability to repay. Rates could stay elevated for the long term.

In both scenarios, paycheques would also take a hit. In the smooth scenario, short-term wages would dip by $1,241 per person, but would end up $1,851 higher — but only after 20 years. In the difficult scenario, a typical worker could earn almost $5,500 less in the short term and almost $12,000 less over the long run.