The Alberta government is contemplating the formation of a provincial pension plan, setting a counterpoint to the national Canada Pension Plan, effectively seceding. Premier Danielle Smith announced that the feedback received from a specially commissioned engagement panel, established as a direct response to this proposal, will be critical in deciding whether or not the concept is to proceed towards a referendum. “This is your pension and thus, your choice. We value your voice and want to hear your views on this,” remarked Premier Smith, during a press conference unveiling a report about the plan.
Maneuvering the concept into actualization since May 2020, the UCP government has been drawing inspiration from Quebec’s provincial pension protocol. This development was encouraged by a report from a Fair Deal Panel, advocating for Alberta to assert a more dominant presence within the Confederation. Despite only 42% of survey respondents deeming this idea suitable, the panel’s findings speculate that Alberta’s young demography could allow a self-structured pension plan to yield multi-billion-dollar benefits.
Alberta’s Finance Minister, Nate Horner, insists this is merely the first wave of dialogues aimed at addressing queries from Albertans. “We expect an influx of questions surrounding an Alberta Pension Plan, on its portability, governance structure, and the decision-making process concerning investments to maintain APP’s stability and sustainability, similar to the CPP,” stated Horner. He emphasizes that the Alberta plan’s successful execution, mimicking Quebec’s, would require agreements with both the CPP and the QPP. The eventual plan would ensure full portability, reciprocal agreements, and a consistent pension regardless of geographical shifts.
Nevertheless, it leaves economists like University of Alberta professor Chetan Dave with numerous unanswered questions. Central amongst them is the legitimate allotment of more than half of the CPP fund to Alberta and the strategy for investing that money to secure pensions. According to the third-party report, Alberta should be eligible for a staggering $334 billion, constituting 53% of the national retirement savings program, if it departs in 2027, adhering to the stipulated three-year notification period.
In the upcoming months, the province will actively seek public opinion through a series of town hall meetings conducted over telephone calls and a public survey. The panel- overseen by former Alberta Progressive Conservative finance minister, Jim Dinning, will engage in dialogues, seeking input, and responding to questions. Dinning encourages every Albertan to review the report, ensure participation in the dialogues, and voice their opinions.
However, initiating the Alberta plan would require anywhere between $100 million and $1 billion, depending largely on the dependency on CPP mechanisms. Implementing the investment arm would add another $75 million to $1.2 billion to the expenses, pivoting considerably on how much the province relies on pre-established structures and specialist knowledge. The report further speculates a steady decline in short-term windfalls as the provincial population ages.
Several obstacles impose on the path to form the Alberta plan including changing legislation, amending employment laws related to the CPP, negotiating pension agreements for Albertans working in other locations, and deciding the entity responsible for running the Alberta plan and its goals, among other challenges.
