Alberta Pension Plan

Policy

Amend

The United Conservative Party believes that the Government of Alberta should…

b. Withdraw from the existing Canada Pension Plan and start an Alberta Pension Plan immediately.

Add

c. No amount paid or transferred to, or assets received by, the Government of Alberta, pursuant to paragraph 113 (1)(b) of the Canada Pension Plan (Canada) shall be used for any purpose other than the establishment and operation of the provincial pension plan.

d. Fully repeal the 2023 Bill 2, known as the Alberta Pension Protection Act. Part 1 of the bill imposes an unnecessary obligation on Alberta to conduct a referendum for withdrawing from the Canada Pension Plan, which goes beyond the requirements set forth in the Canada Pension Plan Act. This imposition restricts Alberta’s autonomy and ability to act in its own best interests within Confederation. Part 2 of the bill redundantly reiterates provisions already established in the Canada Pension Plan Act, thereby lacking any substantive value.

Rationale

The short- and long-term outlook for Alberta’s economy, demographics and population growth far exceeds that of the rest of Canada. Introducing an Alberta Pension Plan (APP) could effectively mitigate significant risks, particularly for younger Albertans. By establishing an APP, the province could guarantee greater stability, ensuring that Albertans can rely on a secure pension system not only for themselves but also for future generations.

By opting to establish an Alberta Pension Plan, Alberta has the potential to mitigate the biggest risks as outlined in the 31st Chief Actuarial Report to the CPP, namely the economy, demographics, and immigration. Such a strategic move would empower Alberta to tailor its pension policies to align more closely with its unique economic landscape, demographic trends, and immigration needs, thus enhancing the province’s ability to manage and mitigate these critical risks effectively.

The 31st Chief Actuarial Report, December 31, 2021, underscores a concerning reality -the CPP has a staggering unfunded liability totalling $1.14 trillion. This substantial figure poses a significant threat to the CPP’s long-term viability. Alarmingly, this amount represents a marked increase from the $884 billion reported just two years prior, illustrating a troubling trend of worsening unfunded liabilities. Furthermore, the report forewarns that by 2026, expenditures will surpass contributions for the first time in CPP history. This impending scenario places Albertans, who constitute the youngest demographic in Canada at greater risk.

The short- and long-term outlook for Alberta’s economy, demographics and population growth far exceeds that of the rest of Canada.

Alberta possesses the financial capacity to withdraw from the CPP immediately, and still afford to provide retirement benefits to all its retirees while generating billions in surplus funds for investment. Astonishingly, only 64 cents of every dollar contributed to the CPP from Alberta is used to pay benefits to Albertans, highlighting the potential for a more efficient allocation of resources under an independent pension system.

Alberta disproportionately contributes to the economic prosperity and fiscal health of Canada as it ranks with the strongest economies in the world.

Alberta with a growing population, the youngest work force in Canada, a strong economic outlook and higher overall incomes offers long term strategic advantages for an Alberta Pension Plan.

Meanwhile, Bank of Canada, deputy governor Carolyn Rogers recently issued a stark warning about Canada’s weak labour productivity and low levels of business investment.

According to the Organization for Economic Co-operation & Development (OECD), Canada will be the worst performing advanced economy for more than the next 3 decades.

An APP holds the promise of providing enhanced benefits, reduced contribution rates for employers and employees, and increased economic autonomy. It is the first step to improving retirement options for Albertans.