Planning for retirement requires keeping an eye on the distant future.
But with four-year election cycles, governments have shorter time horizons to make policy changes that could have long-lasting impacts.
Throughout this election, the Alberta NDP has claimed a United Conservative government would target the province’s participation in the Canada Pension Plan and follow Quebec’s lead to create an Alberta pension plan.
Will the UCP with a second term turf the CPP and start up an “APP”? The short answer is “it depends.” The long answer requires a revisiting of recent history.
In pursuit of a ‘fair deal’
The recent exploration of an Alberta pension plan goes back to the Fair Deal Panel formed in November 2019 under former premier Jason Kenney.
Kenney announced the panel during a speech at the Manning Centre’s “What’s Next?” conference on Nov. 9, 2019. The Manning Centre is now known as the “Canada Strong and Free Network.”
The UCP government immediately started hosting town hall meetings around the province to take opinions from Albertans on withdrawing from the Canada Pension Plan and creating a provincial one.
The day after a town hall in Edmonton, Kenney made an appearance on Corus Radio.
“The idea of creating the Alberta pension plan, I think at this point personally, I think stands on its own merits because it would allow us to reduce premiums to Albertans … given that Alberta has the youngest population,” Kenney said on The Danielle Smith Show on Dec. 4, 2019.
The Fair Deal Panel recommended the government “develop a comprehensive plan” to create a provincial pension and withdraw from the federal one. The panel also recommended the decision go to a referendum.
Not as simple as saying ‘no’
A simple referendum vote in Alberta won’t be enough to pull the province out of the federal pension program.
Any changes to the Canada Pension Plan Act – like having a province withdraw – would require seven of 10 provinces representing two-thirds of the country’s population to agree. The last time the act changed was in 2016.
“That’s actually a big negotiation to make with the rest of the provinces, and it does have to be negotiated with the rest of the provinces,” Tammy Schirle, economics professor at Wilfred Laurier University, said. “You can’t just step out.”
Kenney said Alberta’s young population is causing more payments into the CPP than payouts, an actuarial effect.
Schirle said those demographics are likely to change.
“Right now Alberta looks like a young demographic; that was not necessarily the case. In the past, it used to be an older demographic and it’s not necessarily going to be the case in the future,” Schirle said.
The average age in Alberta is among the youngest of the provinces, but the number of seniors in Alberta is expected to double by 2046 to 20 per cent of the anticipated population of 6.4 million.
Schirle also said the high number of interprovincial workers who earn in Alberta but live or retire in other provinces would add a layer of complexity to navigating an Alberta-based pension plan, one that would require extensive negotiations with the other provinces to make it portable.
Having a pension that spans diverse regions, economies and population ages can help manage risks.
“We often see regional differences and how well the economy is performing for reasons that are often beyond our control,” Schirle said. “When we pool our resources, countrywide, we can manage those contributions a little bit more smoothly than if we’re having to do that within each province.”
May we see the plan?
Government officials anticipated having a report on the viability of an Alberta Pension Plan ready to release by the end of 2022, but in December of that year, Premier Danielle Smith said “new data” would require pushing back a report and referendum vote until after the provincial election.
“It’s unlikely to be held in May,” Smith said, citing the work the finance minister still had to do before publishing the anticipated report. “We want to make sure people understand the implications and the cost. And so it’s unlikely that we’ll be able to roll that out that quickly.”
On Feb. 28, Finance Minister Travis Toews said financial information about an Alberta pension plan, a provincial police force and the Rstar program were not in the 2023 budget because those policies had not been approved. But he said he was looking forward to the information’s release.
“The work will be done sometime in May and it will be important that Albertans receive the report, and can take a look at the opportunities and the risks of an Alberta pension plan and ultimately make the decision,” Toews said.
Two months later – on the first official day of the spring election campaign – Smith, the UCP leader, said the preliminary findings of the report “look quite promising.”
Speaking on the UCP campaign’s Facebook live broadcast on May 1, which took no questions from media, Smith said a version of the report that was ready in 2021, “right in the middle of COVID was not the time to release it.”
“The next one will be the update version and that I think will be out in May as well. When that becomes available, we will put it to Albertans and then Albertans can let us know what they think about it.”
‘Not in our campaign’
Days later in an interview on Global News Morning Calgary, Smith provided a brief explanation of why the UCP didn’t appear to be campaigning on an APP.
“They’re not in our campaign because I think we’ve got so many things that we have done that we’re excited about,” Smith told Dallas Flexhaug on May 5.
Despite not being in the campaign, a move to an Alberta pension plan was part of the policies passed at the UCP AGM on Oct. 22, 2022, when Smith was elected leader.
“The United Conservative Party believes that the Government of Alberta should … withdraw its share of funds from the existing Canada Pension Plan and start an Alberta Pension Plan,” the policy passed by the UCP membership reads.
A beleaguered UCP candidate provided additional insight into the topic’s discussion in UCP circles.
“(The Alberta pension plan) is not a topic of conversation anymore within the conservative government,” Chelsae Petrovic said at a Livingstone-Macleod candidate forum on May 15.
And in the last week of campaigning, Smith reiterated the promise on Wednesday that “no one is touching anybody’s pension.”
The UCP leader said the idea that her party had designs on Alberta’s participation in the Canada Pension Plan was “misinformation” from her opponents.
Smith did not address her pre-election comments on pensions, instead saying, “I think that people should judge me by what I’ve done as opposed to what I’ve said.”
She did say she would listen to Albertans in terms of what they want to do.
“I will always take the guidance of Albertans. They’re my bosses now and I’ll always take guidance as well from my UCP MLAs,” Smith said on Wednesday.
On Thursday, Rachel Notley announced an NDP government, if elected, would pass the “Canada pension protection act” as their third bill in power.
“This one is simple. We will never leave the Canada Pension Plan. Albertans’ pensions will be protected from any meddling by politicians of any party,” the NDP leader said.
A Leger poll published on May 5 showed how unpopular the idea of a pension plan was on the eve of the election campaign.
The online poll of 1,000 people conducted from April 28 to May 1 showed only 21 per cent of Albertans were in favour and 54 per cent opposed the idea of creating an Albertan alternative to the CPP.
Schirle suggested Albertans take a long-term view of their pensions.
“I think for the average Albertan, it’s really important to think about what she wants your pension to be looking like 50 years from now.”