Jim Dinning, engagement panel chair: Thanks, Duane from Camrose. We recognize all of your feedback on the potential Alberta Pension Plan. Isn’t this phone city corridor format a swell thought? Sarah, please put via the subsequent name.
Operator: Our subsequent commenter is Justin, and he’s on the road from Ottawa.
OK, so it didn’t fairly occur this fashion, however might as nicely have.
As restricted because the province’s engagement course of has been up to now on Alberta going it alone on pension — a sunny-side-up questionnaire and phone-in boards — the most important stakeholder on this matter was certain to weigh in.
On Wednesday, Prime Minister Justin Trudeau issued his obvious opening salvo in what’s changing into a federal-provincial pension dispute, and it was an open letter to Premier Danielle Smith. This form of intergovernmental communications is an element unquiet diplomacy, half public relations, and Smith ought to know, as a frequent practitioner of this epistolary gesture.
To all of whom it could concern
Trudeau’s public plea to not rend asunder the Canada Pension Plan comes practically one month after Smith launched her persuasive go-it-alone pitch for Albertans to pay much less, get extra, and take for themselves 53 per cent of the nationwide retirement fund’s belongings.
“The hurt it will trigger is simple,” the prime minister wrote. “Withdrawing Albertans from the Canada Pension Plan would expose thousands and thousands of Canadians to larger volatility and would deny them the understanding and stability that has benefited generations.”
Trudeau added in his letter that he’s instructed his cupboard and officers to “take all essential steps” to clarify the dangers of the Alberta pull-out plan, and to “do the whole lot potential to make sure CPP stays intact.”
Smith, who just lately warned Albertans would freeze in winter blackouts below Ottawa’s net-zero plan, promptly replied with a Pricey-Justin letter, accusing him of making an attempt to “stoke concern within the hearts and minds of Canadian retirees.”
There was not a single quantity in Trudeau’s letter, with no makes an attempt made to counter the provincially commissioned report from Alberta, which stoked hope the province is entitled to $334 billion of CPP belongings, and Alberta Pension Plan’s annual contribution charges might initially be $1,425 decrease for Albertans. Smith says that compares to “solely” $175 extra for these within the eight remaining CPP provinces.
“The Prime Minister could be way more constructive if he responded and gave us an alternate calculation,” Smith instructed reporters. “Like, what does he assume the actuaries would say?”
Not solely has Ottawa not supplied its personal evaluation, nor has the pension-stewarding Canadian Pension Plan Funding Board, whose government Michel Leduc recommended final month that Alberta’s seemingly asset declare is round or beneath 20 per cent, with out displaying CPPIB’s arithmetic.
Reasonably, the pension board issued this week a commissioned critique of Smith’s engagement course of up to now, which consists of cheery adverts, a web site that solely touts the thought’s virtues, a survey that doesn’t provide possibilities to naysay, and no in-person consultations.
In Google searches this week, I noticed an advert from the province headlined “Extra Alberta, Much less Ottawa” — the outdated anti-Ottawa activists’ chorus from the 2001 “firewall letter” that advocated the pension withdrawal. On the first phone city corridor of his engagement course of, Dinning himself evoked that outdated slogan to characterize the Albertans who imagine the reply on an APP is “sure, it doesn’t matter what.”
Whereas the Dinning panel and adverts lean solely on Alberta’s Lifeworks report, economist Trevor Tombe has produced his personal monetary appraisal, estimating the provincial report overstates the province’s truthful declare by half or extra — a beginning pool for a provincial fund that wouldn’t imply fairly as rosy an upside for ratepayers or pensioners.
Extra numbers from respected sources would certainly enrich this debate. Employment Minister Randy Boissonnault hinted some federal evaluation may very well be forthcoming as a part of the Trudeau authorities’s response. “The numbers are going to be crunched very rigorously over the subsequent yr,” the Edmonton Liberal MP instructed reporters Wednesday, cautious to not specify who will crunch.
Assumedly, one thing will come of Trudeau’s uncommon public summons for his group to struggle again on an Alberta measure vis-à-vis Ottawa.
This seems to be the primary time he’s completed so, regardless of all of the provocations, lawsuit threats and Sovereignty Acts to have come from Smith (and Jason Kenney earlier than her).
This hasn’t occurred within the carbon tax struggle, nor different local weather measures, nor flirtation with leaving the RCMP, nor a referendum towards federal equalization.
So why now?
The financial savings recreation
As that is Ottawa (and Alberta), let’s sniff round and counsel politics could also be at play. That is one other uncommon case: Trudeau staking a place towards an Alberta premier during which the Liberals are on the aspect of Alberta widespread public sentiment, with polls repeatedly displaying extra assist staying within the CPP than bailing on it.
Trudeau Liberals might additionally see a chance to notch factors towards Conservative Chief Pierre Poilievre, who hasn’t but planted his marker within the Alberta pension debate.
When Calgary MP Stephanie Kusie requested Wednesday in Query Interval about authorities deficits, Boissonnault rose to upbraid her about Conservatives being “”completely silent on a matter that basically impacts the center class in Alberta.”
A 3rd potential motive for Trudeau’s combating spirit to defend CPP is that this has a special potential influence than most of Alberta’s different plans to retrench from Ottawa affect. When premiers rail towards federal local weather or pure useful resource plans, they argue that an economically stronger Alberta makes a stronger Canada.
That is extra zero-sum. Alberta yanking out a bit of the CPP fund and shrinking the contribution pool would diminish the retirement program for everyone left behind.
The nationwide fund’s investing clout could also be weaker, and the removing of a presently youthful, extra affluent group of working Albertans would materially value different Canadians extra. Whether or not it’s $175 as Smith claims or no matter another person might estimate, no one denies there wouldn’t be an influence, at a time when the price of dwelling is everybody’s large matter.
Nobody is aware of what the longer term holds for both aspect, however volatility inevitably rises for each with smaller funds and teams extra susceptible to decades-long demographic shifts.
The province has been tiptoeing towards a doubtlessly monumental 2025 referendum and a serious Alberta-Canada divorce, with just one aspect of the connection making its unvarnished case.
That has now modified. It requires Smith to battle with two forces concurrently: a CPP that Albertans are reliably keen on, and a primary minister they aren’t.