Pension plan a ‘gamble,’ NDP critic says
EDMONTON Pulling out of the federal pension plan would be a risky and unnecessary move that could jeopardize Albertans’ pensions, the NDP said Thursday.
The much anticipated Fair Deal Panel report, released to the public Wednesday, outlined 25 recommendations including leaving the Canada Pension Plan, which the UCP government believes needs more analysis and work before implementing.
The recommendations are meant to improve the province’s economic position within Confederation and increase Alberta’s power over institutions and funding.
Premier Jason Kenney said the finance department will be looking into the costs, benefits and structure of a possible Alberta Pension Plan and if they find a net benefit, the issue would be brought to a referendum.
NDP MLA and finance critic Shannon Phillips said Alberta leaving the CPP is an unnecessary gamble.
“This is an enormously risky scheme for everyone’s retirement security and the entire problem will cost Albertans dearly,” she said. “It is completely unnecessary and quite frankly, it is a dangerous distraction when we should be worried about people’s pocketbooks, their jobs (and) the economy.”
If the province does bring in an Alberta Pension Plan, one fund manager it is considering is Alberta Investment Management Corp. (AIMCO). The Edmonton-based fund manager recently announced a $2.1-billion loss during the economic downturn triggered by COVID -19.
Phillips said she doesn’t trust Albertans’ pensions going to AIMCO.
“If Albertans wanted to help seniors and older Albertans with more retirement security there are ways to do that that doesn’t involve handing billions of our money to AIMCO to gamble when they have a demonstrated track record of taking unnecessary risks with our money,” she said.
Phillips suggested voluntary pension plans for employers as one possible solution.
The Fair Deal Report’s authors argue that Alberta’s young population is contributing more to the CPP than its older population is using. Alberta workers represented 16.5 per cent of the total contributions to the CPP, while Alberta retirees consumed 10.6 per cent of expenditures.
The report relies on a 2019 study by the Fraser Institute that showed Albertans contributed nearly $28 billion to the CPP from 2008-17, almost four times more than Ontario’s contribution and more than five times of British Columbia.
Phillips said the province’s young population and high earnings will change one day, which is why Albertans should stay with the CPP.
“A pension fund that is well funded and well managed as CPP is able to ensure there are returns for all Canadians over time and at outspread risk,” Phillips said. “The larger the fund, generally speaking, the better off one is.”
The idea of a provincial pension plan isn’t new. In 2001, six prominent Albertans, including Stephen Harper, sent a letter to then-premier Ralph Klein proposing the province withdraw from the CPP and create an APP. An MLA committee report rejected the idea in 2004 because of the high cost of setting up a new system and the complex process of withdrawing from the CPP.
Meanwhile, NDP Leader Rachel Notley addressed concerns that the UCP government could potentially roll back the minimum wage.
When asked Wednesday to commit to keeping the minimum wage at $15 per hour, Premier Jason Kenney said the work of the expert panel his government appointed last summer to assess minimum wage changes would show that the NDP’S 2018 move killed tens of thousands of entry-level jobs.
Notley said she believes this means the government is going to roll back the minimum wage.
“They’re coming for the wages of Alberta’s lowest-paid workers, the very parents of the 40,000 children that minimum wage pulled out of poverty a mere two years ago,” she said.
“The effects (of a rollback) will be to push 300,000 Albertans well below the poverty line. The poverty line in most Alberta cities is you need to be earning a little bit above the minimum wage unless you live in Medicine Hat.”
Prior to the 2018 increase, Alberta’s minimum wage was at $13.60, which was higher than most other provinces at the time including Ontario and British Columbia.
This is an enormously risky scheme for everyone’s retirement security and the entire problem will cost Albertans.