Document Type

Master's Culminating Experience

Publication Date



The status of the economies in various regions of Canada is continually a key concern for the nation's political leaders. Historically disparities have existed between regions as the nation developed over time. The fact that the regions have not developed equally has been highlighted by the Premiers of each province bringing their plight before Canada's parliament.

One region that has recently lagged behind the economic development of most other regions is the province of Quebec. Although quite competitive with the overall Canadian economy until 1960, the Quebec economy now lags behind overall national economic performance. Quebec's unemployment rate remains high at 10.9 percent compared with 9.5 over the rest of Canada.

In most economic analyses of Quebec, the same arguments are presented to explain the poor performance in Quebec. Articles cite lack of regional cycles (Raynaud, 1988) private investment , weakness of infrastructure (Dingwall, 1992), interest rates , and loss of manufacturing (Barrell, 1995), among others, are cited as reasons for economic decline or sluggish performance. Many papers speculate 1.1 Purpose about the outcome of a separation of Quebec from Canada forecasting how the economy will perform under the stress of a newly separated Quebec. (Byers 1980, Martin 1995, McCallum 1992, McGuire 1995) One particular aspect of the society has continually been ignored. A search of economic literature has revealed that there is little attention has been paid to the potentially adverse economic effects of a coalition to gain economic and potential freedom from Canada. This is the Separatist Movement.

The major objective of this study, however, is to construct and evaluate a model which includes a measure of instability or uncertainty which would isolate the effect of the separatist movement on the Quebec economy.