On the face of it, the premise of the Government of Alberta’s pension plan report is solid..It is but a report, of course. It is too early to call it a proposal. First must come a plan, a debate and a referendum..However, whatever happens in the end depends on more than what keen-eyed accountants say, or how successful an NDP campaign of fear and loathing might be..There is some big money at play here. That means it has all the potential to be a pawn in the guerrilla warfare that’s going on between the Trudeau Liberals and the Government of Alberta..As one would expect, there are significant gains and proportionate risks..First, the money. Since the Canada Pension Plan was established in 1966, contributions from hard-working Albertans have subsidized it to the tune of $334 billion..Not to put too fine a point on it, after 57 years of overpaying, this looks like one of those systemic abuses one keeps hearing about. As Premier Smith said during her press conference on the 21st September, "Is it fair that Albertans should pay higher premiums than they need to and receive lower benefits than they could?" This year alone, Albertans would be better off by $5 billion according to the actuaries at LifeWorks, the contractor that prepared the estimates. LifeWorks, formerly Morneau Sheppell, has that calculated to be the equivalent of paying $1,425 less per year in premiums, while receiving the same level of benefit..It is indeed a considerable gift to the rest of Canada. Of course, a federalist Canadian might say 'that this is fine, because ‘if Alberta has a bad patch, the rest of the country can come to its aid, right?’ However, one will find more ‘federalist Canadians’ to make that case in Ontario, than in Alberta. They may have Laurentian ideals but they’re not stupid..It is not the first time that this lopsided pattern of expense and return has been pointed out either. Indeed, some of the enthusiasm that propelled Premier Danielle Smith to the leadership of the United Conservative Party came from exactly this aspiration. As a provincial police force is apparently off the table, the successful launch of a pension plan that has nothing to do with Ottawa would be regarded as a ‘promise kept.’ If Quebec does it, why not Alberta?.Second, the risks. And there are some, starting with confidence..If there is one thing Albertans care about more than regular sex, it is the assurance that when they can no longer work, their pension is secure. To its credit, the Canada Pension Plan has over ten years achieved a 10% net return..Not that this helps Albertans more than anybody else, but that’s not bad at all. Our own RRSP accounts should so prosper….AIMCO (the Alberta Investment Management Corp) would be the most obvious entity to manage a proprietary Albertan pension plan. Perhaps it can do as well. They administer the Heritage Fund and that now makes money..However regardless of which party is in government, there is a further risk, the constant temptation to allow political considerations to influence investment. Indeed, the strongest argument against making the switch is what the NDP might .Meanwhile, also to its credit, the CPP invests in Alberta energy and while it has an all-Canada mandate, minus Quebec, it isn’t actually a creature of the federal government..Things could be worse than the status quo, then..However, none of this takes place in a vacuum..Even as the Government of Alberta is fighting with the Trudeau Liberals over their unrealistic and borderline punitive demands for a net-zero electricity grid, so the prospect of pulling as much as $334 billion out of the CPP — something Alberta is legally able to do — must set off alarm bells in Ottawa. After all, if the CPP hits a speed bump, it is the Government of Canada that has the problem. And for the record, as the CPP fund stands at $570 billion, and Alberta wants $334 billion out of it, there would be a massive problem..Smith strenuously discounts any such linkage. "This is just us trying to get the best deal for Albertans." Left unsaid, "And if we were going to play hardball, do you think I'd tell you?"). Jim DinningOne-time Alberta treasurer Jim Dinning will chair the APP Engagement Panel, that is to conduct Alberta-wide consultations over the fall and in to the spring of 2024 with Albertans about the Alberta Pension Plan report. He called it "an intriguing opportunity." A referendum indicating support from a majority of Albertans would be required to advance the proposal. .No, probably not. But, we've done well by the rest of the country for 57 years. They're not going to like it when we stop. Tell me, M. Guilbeault, just how serious are you about this net zero nonsense?.And if it's politics as well as economics, the report calculates that this could be done by January 2027 which, bless my soul, is just a few months before the next Alberta election... .A higher pension from an Alberta pension plan?.Gets my vote..Final thought, great to see another greying Alberta icon in the person of Jim Dinning joining Dr. John Cowell, now running Alberta Health Services, in service to the next generation of leaders. How the decades melt away...
On the face of it, the premise of the Government of Alberta’s pension plan report is solid..It is but a report, of course. It is too early to call it a proposal. First must come a plan, a debate and a referendum..However, whatever happens in the end depends on more than what keen-eyed accountants say, or how successful an NDP campaign of fear and loathing might be..There is some big money at play here. That means it has all the potential to be a pawn in the guerrilla warfare that’s going on between the Trudeau Liberals and the Government of Alberta..As one would expect, there are significant gains and proportionate risks..First, the money. Since the Canada Pension Plan was established in 1966, contributions from hard-working Albertans have subsidized it to the tune of $334 billion..Not to put too fine a point on it, after 57 years of overpaying, this looks like one of those systemic abuses one keeps hearing about. As Premier Smith said during her press conference on the 21st September, "Is it fair that Albertans should pay higher premiums than they need to and receive lower benefits than they could?" This year alone, Albertans would be better off by $5 billion according to the actuaries at LifeWorks, the contractor that prepared the estimates. LifeWorks, formerly Morneau Sheppell, has that calculated to be the equivalent of paying $1,425 less per year in premiums, while receiving the same level of benefit..It is indeed a considerable gift to the rest of Canada. Of course, a federalist Canadian might say 'that this is fine, because ‘if Alberta has a bad patch, the rest of the country can come to its aid, right?’ However, one will find more ‘federalist Canadians’ to make that case in Ontario, than in Alberta. They may have Laurentian ideals but they’re not stupid..It is not the first time that this lopsided pattern of expense and return has been pointed out either. Indeed, some of the enthusiasm that propelled Premier Danielle Smith to the leadership of the United Conservative Party came from exactly this aspiration. As a provincial police force is apparently off the table, the successful launch of a pension plan that has nothing to do with Ottawa would be regarded as a ‘promise kept.’ If Quebec does it, why not Alberta?.Second, the risks. And there are some, starting with confidence..If there is one thing Albertans care about more than regular sex, it is the assurance that when they can no longer work, their pension is secure. To its credit, the Canada Pension Plan has over ten years achieved a 10% net return..Not that this helps Albertans more than anybody else, but that’s not bad at all. Our own RRSP accounts should so prosper….AIMCO (the Alberta Investment Management Corp) would be the most obvious entity to manage a proprietary Albertan pension plan. Perhaps it can do as well. They administer the Heritage Fund and that now makes money..However regardless of which party is in government, there is a further risk, the constant temptation to allow political considerations to influence investment. Indeed, the strongest argument against making the switch is what the NDP might .Meanwhile, also to its credit, the CPP invests in Alberta energy and while it has an all-Canada mandate, minus Quebec, it isn’t actually a creature of the federal government..Things could be worse than the status quo, then..However, none of this takes place in a vacuum..Even as the Government of Alberta is fighting with the Trudeau Liberals over their unrealistic and borderline punitive demands for a net-zero electricity grid, so the prospect of pulling as much as $334 billion out of the CPP — something Alberta is legally able to do — must set off alarm bells in Ottawa. After all, if the CPP hits a speed bump, it is the Government of Canada that has the problem. And for the record, as the CPP fund stands at $570 billion, and Alberta wants $334 billion out of it, there would be a massive problem..Smith strenuously discounts any such linkage. "This is just us trying to get the best deal for Albertans." Left unsaid, "And if we were going to play hardball, do you think I'd tell you?"). Jim DinningOne-time Alberta treasurer Jim Dinning will chair the APP Engagement Panel, that is to conduct Alberta-wide consultations over the fall and in to the spring of 2024 with Albertans about the Alberta Pension Plan report. He called it "an intriguing opportunity." A referendum indicating support from a majority of Albertans would be required to advance the proposal. .No, probably not. But, we've done well by the rest of the country for 57 years. They're not going to like it when we stop. Tell me, M. Guilbeault, just how serious are you about this net zero nonsense?.And if it's politics as well as economics, the report calculates that this could be done by January 2027 which, bless my soul, is just a few months before the next Alberta election... .A higher pension from an Alberta pension plan?.Gets my vote..Final thought, great to see another greying Alberta icon in the person of Jim Dinning joining Dr. John Cowell, now running Alberta Health Services, in service to the next generation of leaders. How the decades melt away...
