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Prime Minister Justin Trudeau can usually only count on polite applause when he’s talking to an Alberta business crowd.
But when executives hosted him this week at an Ottawa reception, he found one line worked surprisingly well — praise for the national pension program that Premier Danielle Smith wishes to exit.
In a list of federal programs assisting Alberta (health care, transit, housing), Trudeau added:
“It’s why we strengthened the Canada Pension Plan and why we need to make sure it continues to protect a stable and dignified retirement for all Canadians.”
As the solid bout of clapping died down, the prime minister smirked, “Couldn’t resist that one.”
The assembled energy executives and business lobbyists have ample qualms with federal energy regulations and climate strategies, but they don’t have a bone to pick with CPP.
And this is an area where corporate Alberta’s attitudes are in sync with the broader public.
According to the first major poll conducted since Smith began her persuasion pitch to remove Alberta from CPP, the proposal remains about as widely opposed as it was before. Fifty-two per cent of Albertans think it’s a bad or very bad idea, compared to 19 per cent who think it’s a good or very good one, and 15 per cent who are in the middle, the Abacus Data survey shows.
Last month, Smith released a feasibility study that suggested Alberta would get to start its own pension plan with 53 per cent of the CPP’s assets — one-third of a trillion dollars. With that much in its kitty, an Alberta Pension Plan could offer residents a rosy future of both lower contributions and higher benefits, arguments the government is presenting through one of its large new advertising campaigns. (No, not that one; the other 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.
“The (people) most engaged, most likely to vote, probably the most important to the UCP base itself are the most likely to be resistant to this idea right now,” pollster David Coletto said in an interview.
For the pullout to be approved in a 2025 referendum, Smith and other proponents would have to convince all those people who consider it an “OK idea” to support it, convert some opponents to supporters, and ensure those enthusiasts come out to vote in greater numbers than the APP skeptics.
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.)
WATCH | Prime minister takes jab at Alberta pension plan:
Featured VideoPrime Minister Justin Trudeau took a jab at the Alberta government’s pitch to embark on its own pension plan while talking about his government’s track record on emissions, climate change and the economy.
The UCP government is doing its best to accentuate all the idealized positives of a plan that would supposedly enrich everybody, including the pension’s payers and payees, complete with an online survey that doesn’t offer Albertans much chance to register displeasure — preferring, instead, to describe how much rosier they’d like their contributions and benefits to be.
It might help Smith’s sales pitch if more groups or experts were coming out to bolster the case for the APP. They’re getting the inverse.
The national small business lobby questions the true benefits for Albertans, and the impact on members in the rest of Canada. The Calgary Chamber of Commerce is putting up caution flags about the various uncertainties in abandoning the predictable old 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.
“Your returns are going to be challenged because you can’t invest in (relative) size,” Yedlin said.
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.
There is one Alberta entity that used to be more cautious about the pension idea, but now sees far more upside. That would be the Alberta Finance Department itself.
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 expresses several other risks, like high administration costs, and weaker returns.
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.
But it does underline the point that if the argument for a much larger take was widely understood or shared before the Lifeworks report became the apple of Smith’s eye this year, the more astronomical figure would have been more common in the discourse before now. (But it hasn’t been; in 2020, the Fair Deal Panel itself predicted Alberta’s asset grab would be a more modest $40 billion to $70 billion.)
The Smith government’s new arguments don’t seem to have worked yet, but they have two years to shift opinion before a possible referendum in 2025. That leaves much more time for detractors to tilt the debate in their favour, as well.
Other provinces may develop counter-arguments to ensure Alberta doesn’t weaken their program — and Trudeau’s remarks on this divisive issue may one day amount to more than smirking asides.
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