From time to time, Calgary Herald columnist Rick Bell has been used by Alberta Conservatives to float their trial balloons.
So when Mr. Bell reported that Premier Danielle Smith was thinking about holding a referendum on whether Alberta should dump the Canada Pension Plan (CPP) and set up its own pension scheme as early as May 2023, he created an instant buzz.
Mr. Bell’s column didn’t mean the United Conservative Party (UCP) actually planned to hold a referendum in May. There’s a pretty good argument that would amount to political suicide.
After all, say what you will about cranky old Boomers, they get out and vote, even if astonishing numbers of them ignore their own interests and vote conservative.
But when CPP recipients and those about to retire started to realize that if Ms. Smith got her way, their pensions would almost certainly end up being transferred into a new plan that is smaller and less secure, had higher unfunded liabilities and was probably badly managed, that would scare the beejeepers out of large numbers of otherwise reliable conservative voters with predictable results in the polling booth.
This in turn likely explains why Ms. Smith sorta, kinda disavowed the idea of a referendum next spring on the same day Mr. Bell’s column appeared, admitting at a news conference about using Ubers to free up ambulances and paramedics that “it’s unlikely to be held in May.”
Still, if Mr. Bell was writing about this, and Ms. Smith was talking to him about it, there’s a reason, and that reason has political significance.
We don’t need Mr. Bell to tell us the UCP is now dominated by the Take Back Alberta extremists who ran Jason Kenney out of town as too liberal (!) and got Ms. Smith elected as his replacement, or that the party’s increasingly open separatist agenda remains on its front burner.
And we all know the idea of an Alberta pension plan, which first came to public attention in 2001 in the notorious Firewall manifesto circulated by Stephen Harper and a few of his cronies, has always had a certain appeal to utopian market fundamentalists like Ms. Smith, if only as a way to bludgeon Canada into adopting more of their neoliberal agenda.
As is also well known, Ralph Klein, who was premier at the time, sensibly tossed the Firewall letter into the shredder and it was forgotten about until Mr. Kenney entered Alberta politics in 2017 with his own kitbag of terrible ideas.
“There’ll be a vote on it,” the Ms. Smith told Mr. Bell as recounted in yesterday’s column. Whether or not it’s in May, in time to coincide with the scheduled May 29 provincial election, he quoted her adding, “I’d have to see if we have enough information out at that point.”
So how likely is a referendum at any time on severing Albertans from their CPP?
The answer: Probably not very.
Indeed, there may not even be an election in 2023. If the polls are not auspicious come springtime, the UCP will find a way to put off the vote.
Unlike the eventual success of an Alberta pension plan (APP), you can take that to the bank!
Moreover, not only would an APP be politically unwise, it would almost certainly be virtually unworkable, Ms. Smith’s brassy gaslighting notwithstanding.
As pension experts Ellen Nygaard and Virendra Gupta wrote on Bob Ascah’s Alberta economics blog in the fall of 2021, a province can’t just quit the CPP.
The CPP is governed jointly by federal and provincial governments, they explained, and Parliament’s legislation means “changes must be approved by two-thirds of the provinces representing two-thirds of the population.” (Quebec had its own pension plan from the get-go.)
Theoretically, CPP legislation would permit a province to withdraw if it set up an equivalent plan. But “an Alberta plan would inherit liabilities for all benefits workers earned while working in Alberta since 1966. Because so many Canadians have moved into and out of Alberta since then, determining Alberta’s liabilities would not be easy,” Ms. Nygaard and Mr. Gupta wrote.
“Liabilities and the unfunded liabilities assumed by an APP would be considerably larger than proponents of an APP seem to have contemplated,” they also observed.
And using Alberta’s just-passed Sovereignty Act to simply pull the plug and walk away wouldn’t work either, at least if Alberta wanted some assets to go with its liabilities.
What’s more, if the Alberta Investment Management Corp. (better known as AIMCo) is supposed to be the manager – as happened to the Alberta Teachers Retirement Fund on Mr. Kenney’s watch without its members and pensioners getting a vote on the matter – that’s a huge potential problem too.
The Canada Pension Plan Investment Board, Ms. Nygaard and Mr. Gupta noted, “enjoys a wide reputation for its independence, focused mandate and performance.”
“In contrast, AIMCo has multiple clients with multiple mandates, some of which are directed by the provincial government. As a result, AIMCo essentially operates like a mutual fund company that runs many funds from which the clients can choose.” (Emphasis added.)
And since the Alberta Government has sole authority to appoint AIMCo’s board, the opportunities for political interference are vast.
So, if the whole idea is not achievable and politically dangerous, what the heck was Ms. Smith doing raising it now?
Well, it’s a useful distraction presumably.
It’s probably better to have voters yakking about a half-baked pension scheme that can be dropped at some point in the future than the cold hard fact our hospitals are so packed with sick children and seniors that once again the system is on the verge of collapse – thanks to never-ending UCP mismanagement and negligence.
If by miracle or manipulation the UCP managed to win a referendum to set up an Alberta pension plan, and the whole thing then fell apart in negotiations with other provinces to chop up the CPP, I suppose that could be trotted out as an argument that Alberta would be better off as a separate country, albeit one without access to the sea.
Or it could be that Ms. Smith has incredibly bad judgment, and this is just one more example.
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