Quebec Sovereignty Resurgence Signals Economic Volatility as Referendum Risks Peak

2026-02-05 global

Quebec City, Thursday, 5 February 2026.
With referendum probability reaching a thirty-year high, analysis warns that political instability threatens two million jobs dependent on interprovincial trade, signaling profound market uncertainty.

Political Vacuum Fuels Separatist Momentum

The political landscape in Quebec has undergone a seismic shift following the resignation of Premier François Legault in January 2026, leaving a power vacuum that has emboldened the separatist movement [4][7]. With the ruling Coalition Avenir Québec (CAQ) and the opposition Liberals currently operating under interim leadership until their respective conventions in April and March, the Parti Québécois (PQ) has surged to the forefront of provincial polling [4][7]. Having rebounded from a historic low in 2022, the PQ has secured victories in three out of four recent by-elections and is now leveraging this momentum to promise a third referendum on sovereignty within its first mandate, should it win the general election scheduled for October 2026 [1][4]. This resurgence represents the highest risk of a referendum in thirty years, forcing federal policymakers to aggressively monitor the shifting dynamics in Quebec [1].

Quantifying the Economic Stakes

For the business community, the implications of this political instability are immediate and quantifiable. Data indicates that approximately two million jobs across Canada are dependent on interprovincial trade involving Quebec and Alberta, with 500,000 jobs in Quebec alone relying on exports to the rest of the federation [3]. Trevor Tombe, a professor of economics at the University of Calgary, warns that the short-term costs of separation would be severe; a hypothetical 15% decline in trade volumes could trigger a GDP loss of roughly $40 billion [3]. These figures highlight the fragility of the current economic order, particularly as 400,000 jobs outside of Quebec are directly tied to trade with the province [3].

Federal Tensions and Interprovincial Reactions

The prospect of a separatist government has already elicited sharp reactions from other provincial leaders, signaling potential friction within the federation. During a meeting of the Council of the Federation the week of January 26, 2026, Ontario Premier Doug Ford explicitly characterized a potential PQ victory as a “disaster” for Canada [1]. These tensions were further inflamed on January 27, 2026, when Prime Minister Mark Carney made a historical reference regarding the Plains of Abraham that was poorly received in Quebec, complicating the federal government’s position as it navigates the rise of nationalist sentiment [1]. Despite these headwinds, the PQ views the current geopolitical climate—including trade negotiations with the United States—as a catalyst that may convince more voters of the necessity of a nationalist government [1].

Polling Realities and Leadership Dynamics

As the National Assembly resumed operations on February 3, 2026, the path to a referendum remained contested [7]. While the PQ leads in popular support, the appetite for actual independence appears lower; a recent Léger poll found that 62% of respondents intend to vote “No” in a referendum, compared to only 29% for “Yes” [2]. Furthermore, the CAQ’s leadership race has tightened the field. The entry of Christine Fréchette, a candidate focused on economic stability and Quebec-Ottawa relations, has narrowed the PQ’s lead to just five percentage points (30% to 25%) as of early February [5][7]. Investors are now watching to see if Fréchette’s economic focus can counter the PQ’s sovereignty narrative before the critical October election [5][7].

Sources

Canada Political risk