U.S. forecaster Peter Zeihan, a former geopolitical analyst with the security firm Stratfor, has spent his career trying to predict the future of tumultuous states — recently, he’s turned his gaze to North America. Now, his latest book, The Accidental Superpower, takes a bleak look at the direction of the world in general. Among his speculations, the future of Alberta in Canada. He spoke to the Post‘s Jen Gerson.
Q Tell me about your book as a whole?
A The global system as we understand it is highly artificial. The United States created it after the Second World War to fight the Cold War. We introduced this concept of free trade that allowed anyone we were friendly with to trade with anyone else we were friendly with — the U.S. guaranteed the security of the oceans, it would open its markets, it would patrol the Middle East and make sure energy could get to where it needed to go. Before, you had competing empires fighting for resources and markets. The American system expanded peace and prosperity throughout the world in a way the human race had never experienced before. But we did it to contain the Soviet Union. Since the Cold War ended, the U.S. has been withdrawing from that system.
A Two big things. The first is shale oil — the U.S. will be energy independent by the end of 2016. Shale is severing the strongest link between us in North America and the rest of the world. The Middle East is becoming someone else’s problem.
The second piece is demographics. The percentage of Americans who are baby boomers is smaller than the equivalent cohort elsewhere. Every other country (except New Zealand) has a much larger population hitting mass retirement, and you’ve got all the financial problems that come with that.
Q Amid this interesting geopolitical shift, you devote a chapter to Alberta’s possible secession.
A Canada’s demographic situation is similar to the rest of the developed world — a large population moving toward retirement and hardly any young people in the replacement generation coming up.
However, Alberta does not fit that mould. It is the youngest province, and is becoming younger, better paid and more highly skilled as the rest of Canada becomes older and less skilled, and a ward of the state financially.
The other piece is, of course, energy. British Columbia has been hostile to Alberta’s efforts to diversity oil exports and the Atlantic is more than 2,000 miles away.
But really, it comes down to demographics. Right now, every man, woman and child in Alberta pay $6,000 more into the national budget than they get back. Alberta is the only province that is a net contributor to that budget — by 2020, the number will exceed $20,000 per person, $40,000 per taxpayer. That will be the greatest wealth transfer in per capita terms in the Western world. The only other place we see things like that is in Saudi Arabia, where the oil-producing regions subsidize the rest of the country.
Q Secession has been a dirty political word in Alberta for several years, with politicians rumoured to be secret secessionists. That talk died down when the Harper Conservatives were elected — when a group of people who came out of the Alberta mould assumed power.
A On Stephen Harper’s watch, Alberta’s tax bill has basically tripled. This is going on while you have a federal government that is pro-Alberta.
From my point of view, it doesn’t matter if it’s this government, the next government, or the one after. The demographic trends are locked in. If you get a government in Ottawa that isn’t Conservative, isn’t born, bred, raised and trained in Alberta, what do you think they’re going to be doing to the tax policies?
Q So this is a conversation about secession to the U.S.?
A Alberta as an independent country doesn’t solve a huge number of problems. If it left Canada, its currency goes through the roof because all it has is oil exports, and that would drive agriculture out of business. It would be a one-horse economy in a very short time.
Seceding to the U.S. becomes the only political and economic option. If you do that, the inflation issue goes away, the tax problem goes away, the security problem goes away. Alberta gets everything it says it wants out of Canada within the first year of joining the U.S.
Seceding to the U.S. becomes the only political and economic option
Q Do you think the Americans would have us?
A Americans have a reputation for being ignorant and short-sighted, but I would be stunned if there was a single person in Congress who would think this a bad idea. If you bring Alberta into the country, the U.S. becomes technically energy independent overnight. I would expect ratification of the expansion to sail through Congress in a matter of hours.
Q In Alberta, the numbers and logic might make sense, but politically and culturally it still seems to be a huge stretch to think Albertans would seriously consider this.
A I’m a forecaster. My job is to look at the trends of how the world works. Comfort makes people a little more passive and Canada is a comfortable place. Because secession is legal, Albertans are going to have to think about this — that doesn’t mean they will seriously consider it. But a $40,000 per taxpayer bill every year, that’s a bit of a motivator.