When addressing an Alberta business audience, Prime Minister Justin Trudeau typically receives polite applause as opposed to enthusiastic support.
However, during a recent Ottawa reception, executives found that one particular statement resonated unexpectedly well – expressing admiration for the national pension program that Premier Danielle Smith intends to withdraw from.
Trudeau included Alberta in the list of federal programs that provide assistance, which includes health care, transit, and housing.
“We have taken measures to enhance the Canada Pension Plan, and it is crucial that we ensure its ongoing ability to safeguard a secure and respectable retirement for every Canadian.”
After the enthusiastic applause subsided, the prime minister grinned and remarked, “I couldn’t help myself.”
The gathered energy executives and business lobbyists have many concerns about federal energy regulations and climate strategies, but they do not have any objections to CPP.
This is an area where the attitudes of corporate Alberta align with those of the wider public.
The recent survey by Abacus Data indicates that the proposal to remove Alberta from CPP, despite Smith’s efforts to persuade, still faces significant opposition. Fifty-two percent of Albertans view it as a bad or very bad idea, while only 19 percent consider it good or very good. Additionally, 15 percent remain neutral on the matter.
Smith recently published a study indicating that Alberta could establish its own pension plan using 53% of the assets from the CPP, totaling one-third of a trillion dollars. This substantial amount would allow the Alberta Pension Plan to provide residents with reduced contributions and increased benefits, as highlighted in a government advertising campaign. (Not the well-known campaign, but a different one.)
Those boasts don’t seem to have shifted public opinion much. The few who support it are overwhelmingly younger Albertans — those farthest away from receiving pensions, and are therefore less vulnerable to any gyrations or risks in the health of the retirement security program.
In an interview, pollster David Coletto stated that the individuals who are highly involved, have a higher probability of voting, and are potentially crucial to the UCP’s foundation are currently the ones most likely to oppose this concept.
To gain approval in the 2025 referendum, Smith and other supporters of the pullout must persuade individuals who currently view it as merely acceptable to fully endorse it, convince opponents to change their stance, and ensure that enthusiastic supporters turn out to vote in larger numbers than those skeptical of the APP.
Coletto notes that most referendums to directly change the status quo get rejected, a record that holds from Québec separatism to the Charlottetown Accord right up to Alberta’s 2021 ballot question to ditch Daylight Saving Time. (The province’s equalization referendum? It directly changed nothing.)
Prime minister criticizes Alberta pension plan.
Featured VideoWhile discussing his government’s achievements in emissions, climate change, and the economy, Prime Minister Justin Trudeau made a sarcastic remark regarding the Alberta government’s proposal to establish its own pension plan.
The UCP government is making great efforts to highlight all the positive aspects of a plan that is supposed to benefit everyone, including those who pay into and receive pensions. They have even created an online survey, although it does not provide Albertans with many opportunities to express their dissatisfaction. Instead, it focuses on describing how they would like contributions and benefits to be more favorable.
If additional groups or experts were supporting the case for the APP, it could potentially enhance Smith’s sales pitch. However, the opposite is currently happening.
The small business advocacy group at the national level raises concerns about the actual advantages for residents of Alberta and the consequences for members in other parts of Canada. The Calgary Chamber of Commerce expresses concerns about the potential risks and uncertainties associated with discontinuing the reliable traditional Canadian pension system.
“We’ve benefited from being part of a bigger pool. That means the expenses are shared, the risks are shared,” chamber president Deborah Yedlin told CBC’s West of Centre podcast. The province cannot rely on the strong investment performance that the national fund enjoys, she added.
Yedlin mentioned that your returns would face difficulties as you are unable to invest considering the (relative) size.
The Fraser Institute, a conservative think-tank, is optimistic about the idea and potential perks for Albertans. However, its thinkers have been making the same case about Albertans paying less into a theoretical pension plan of their own for years, before Alberta began studying the idea in earnest under former premier Jason Kenney’s Fair Deal Panel.
The Alberta Finance Department, which was previously hesitant about the pension concept, now recognizes its greater potential and benefits.
In September 2019, officials drafted a briefing note to then-finance minister Travis Toews, who served in that role for both Kenney and Smith. It was made public under Freedom of Information law and previously reported on in 2020, but bears revisiting today.
Unlike the government’s current promotions, the briefing note assesses pros and cons. Pro: a relatively young province could offer residents lower contributions.
Con: that future is more prone to bumps: “The diminished risk pool of an Alberta Pension Plan is more likely to create contribution volatility relative to the CPP,” the note to Toews states.
It indicates various additional risks, such as elevated administrative expenses and diminished profits.
The 2019 briefing note doesn’t only consider the assets Alberta could withdraw from CPP, but it also notes the high liabilities. And its estimated slice of CPP assets is much smaller than the government’s recent Lifeworks report — below 12 per cent, rather than 53 per cent.
That amount may be overly conservative compared to what economist Trevor Tombe has supposed Alberta could get, and compared to Alberta’s share of population among nine CPP provinces.
However, it emphasizes the fact that if the justification for a significantly higher amount was widely acknowledged or agreed upon prior to the Lifeworks report gaining significant attention this year, the larger figure would have been more frequently discussed. (However, this hasn’t been the case; in 2020, even the Fair Deal Panel predicted that Alberta’s asset acquisition would be a more conservative $40 billion to $70 billion.)
The new arguments presented by the Smith government have not proven effective thus far, but they have a two-year window to change public opinion prior to a potential referendum in 2025. This also provides detractors with ample time to sway the discussion in their favor.
Alberta’s program weakening could prompt other provinces to present opposing viewpoints, and Trudeau’s comments on this divisive matter may eventually hold more significance than just casual remarks.
Source: cbc.ca
