Alberta’s new finance minister is being told by the premier to continue looking into a pension plan and tax collection agency.
In a mandate letter released Thursday, Danielle Smith tells Finance Minister Nate Horner to look into relying on Ottawa less by exploring both those ideas.
In the letter, Smith tells Horner to start:
- “Releasing the Alberta Pension Plan report and consulting with Albertans on its findings to determine whether a referendum should be held to establish an Alberta Pension Plan that will increase pension benefits for seniors, reduce premiums for workers and protect the pension interests and benefits of all Albertans.”
- “Exploring the feasibility and advantages of establishing an Alberta Revenue Agency to collect all provincial tax revenues and developing a detailed strategy for its implementation should the government choose to pursue it.”
The former finance minister, Travis Toews, received similar orders when Smith first became premier in late 2022.
When the ideas were first introduced last year, they were met with criticism.
In an interview with Global News, Horner says neither is guaranteed, this is just an exploratory process.
“I think all that work is positive. If it can be an opportunity for the province, we should look at it,” he explained. “All things have to be considered, and especially the practical considerations for Albertans.”
While he could not provide a timeline, Horner said he anticipates the report to be released soon.
Economist Moshe Lander from Concordia University says neither an Alberta pension plan or a revenue agency bring any benefit to Albertans.
“The sales pitch that’s going to be put out there is that this is good for Albertans without being able to explain financially that this is how much money you’ll save as a result of this scheme, because I don’t think that there’s cost savings there to have,” he said.
“If Alberta wants to thumb its nose at Ottawa, this is essentially cutting off your nose to spite your face.”
Lander calls this bad economics but good politics.
“It’s good politics, it’s always good politics, especially when you’re a party that’s running on anger with Ottawa and you’re trying to tap into this deep-seated hostility that some have towards Ottawa. These schemes are showing if Ottawa doesn’t give us what we want, then we’ll go do it on our own. Great, but it’s going to cost more,” Lander added.
“Good politics always beats good economics, that’s the unfortunate truth.”
He doesn’t believe the average Albertan will vote in favour of an Alberta-specific pension plan.
“You’re essentially going to be raising the cost because you still have administrative costs — you still have paperwork to process, you still have to actually figure out who’s eligible, who’s ineligible, making sure the deposits are made at the appropriate times, and dealing with all the different issues that could arise from an insurance scheme,” Lander explained.
“The reality is the more people you have in any insurance scheme (such as the federal one), the lower the costs are.”
Horner says it’s important to analyze every opportunity available to provinces.
“The Fair Deal Panel, that’s why it was put together – to see what opportunities could be out there,” he said.
“Alberta has been a driver of the Canadian economy a long time, I think the pension question is just ‘Would we be better served to be keeping those assets — holding them maybe separately — if we can lower the premiums and increase the benefit.”
Retired accountant Peter Salomon, originally from Quebec, now lives in Alberta. He doesn’t like the Quebec Pension Plan or Revenu Québec, and he doesn’t like the idea of Alberta following suit.
“It would be a step backward. It would involve more risk — financial risk — for me and my family. So, I’d resist it if there was an option to resist it,” he said.
“Diversification is one of the keys to successful investing, and the Canada Pension Plan involves diversification at a national level, rather than a biased provincial level.”
He believes an Alberta pension plan makes little sense and even fewer cents.
“A smaller provincial program would be less resilient in downtimes, and I haven’t got a lot of confidence it’ll be well managed.”
Meantime, the Alberta NDP calls this mandate letter a disaster for the retirement savings of Albertans.
“This plan will cost hundreds of millions of taxpayer dollars while simultaneously jeopardizing every Canadian’s retirement,” NDP Finance Critic Shannon Phillips said in a statement.
“Albertans should be deeply concerned by the Premier’s bizarre obsession with getting her hands on their retirement savings.”