Braid: The UCP's Alberta pension drive is revived and forging forward

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Do you want the thought of an Alberta pension plan but?

In all probability not. A ballot early this yr confirmed solely 21 per cent of Albertans again the UCP’s pet challenge. Different reactions vary from disinterest to terror.

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When the election marketing campaign got here alongside, the UCP left the pension scheme out of their platform. The NDP fortunately used it as a scare set off.

Submit-election, the drive for a provincial pension plan is totally revived.

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Finance Minister Nate Horner’s mandate letter from Premier Danielle Smith fees him with “releasing the Alberta Pension Plan report and consulting with Albertans on its findings, to find out whether or not a referendum ought to be held to determine an Alberta Pension Plan that can improve pension advantages for seniors, scale back premiums for employees, and shield the pension pursuits and advantages of all Albertans.”

Authorities sources recommend that when the time comes for a referendum, in all probability in two years, there can be particular greenback quantities for every age at which retirees resolve to begin taking the pension.

The funds can be meaningfully increased than CPP maximums, now about $1,300 for individuals beginning to acquire at age 65.

That may persuade some individuals. However why commerce the protected, dependable Canada Pension Plan, backed by a inhabitants of 40 million, for an Alberta pension fund primarily based on a inhabitants of solely 4 million?

One key argument is that Alberta’s younger, comparatively high-earning populace already contributes massively to the CPP, whereas Alberta seniors are paid pensions on the identical scale as different Canadians. The federal government feels there’s big financial energy behind this plan, and it ought to profit Albertans immediately.

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That’s in all probability true — for now. However what occurs if the oil and fuel sector shrinks and wealth creation can’t get replaced by inexperienced power? There may come a day when the federal government has to boost contributions or freeze advantages, or each.

Additionally, Ottawa isn’t precisely a silent accomplice on this.

Alberta is inside its constitutional rights so long as sure situations are met and the Alberta plan is nearly as good or higher than the federal one.

The advantages must be transportable throughout Canada and overseas, and listed to inflation.

However Ottawa will resolve if Alberta’s plan is ample — and, most significantly, how a lot money Alberta may take out of the federal fund.

The feds, as we all know, have a protracted historical past of stalling strikes that appear inside provincial jurisdiction however don’t please them.

Additionally, it’s not clear whether or not present Alberta pensioners would have the ability to stick with the CPP, or be pressured into the Alberta plan.

That’s certainly one of many tough issues for which Quebec’s instance offers no solutions.

Quebec has had its personal pension plan since 1965. It started together with the Canada Pension Plan so there was no transition, simply twin startups. Disentanglement by one province has by no means been contemplated.

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Nonetheless, Alberta advocates usually cite the Quebec Pension Plan as a optimistic instance.

Quebec’s contribution price is barely increased than the CPP percentages. Funds to seniors are nearly equivalent.

The primary profit to Quebec, maybe, is that the Caisse de depot, which manages investments, has turn out to be a monetary powerhouse with greater than C$400 billion below administration.

With massive cash comes massive threat. The Caisse misplaced $24 billion final yr. That hit falls on Quebec alone.

So, who would handle Alberta’s fund? The apparent candidate is the Alberta Funding Administration Corp. (AIMCo), wholly owned by the federal government, with $158 billion in property.

However AIMCo’s popularity is shaky as of late after pandemic-era losses that echoed all over the world. Many individuals weren’t blissful when the trainer’s pension plan was force-marched into its arms.

Surprisingly, the UCP would possibly think about handing the job to the Canada Pension Plan Funding Board, the massive hitter with almost $600 billion below administration.

In that case, Albertans’ pension cash can be managed and invested by a federal Crown company.

Go determine.

Don Braid’s column seems commonly within the Herald

Twitter: @DonBraid

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