NDP wants to know province’s plan with CPP
By Al Beeber - Lethbridge Herald on July 6, 2023.
LETHBRIDGE HERALDabeeber@lethbridgeherald.com What is the UCP government’s plan for the Canada Pension Plan?The Alberta NDP is calling on premier Danielle Smith to tell Albertans if the government intends to keep the province in the plan or create its own.
West Lethbridge MLA Shannon Phillips, the NDP finance critic for insurance and pensions, said Wednesday outside the old courthouse that the CPP is considered the No. 1 asset manager for retirement savings in the world. It’s an asset manager that also offers flexibility and affordability for Canadians who relocate within Canada. Albertans who move can maintain CPP contributions and accumulate pensionable service seamlessly, said Phillips.
If the UCP does move to replace CPP, Phillips said the process will be a lengthy one involving likely court challenges from other provinces since the decision would impact all Canadians.
Changing the plan would impact the appeal of moving to Alberta for Canadians from other provinces paying into the CPP and vice versa.
“During the election Premier Danielle Smith was asked multiple times about her impending plans for pulling Alberta out of the Canada Pension Plan and jeopardizing all of Albertan’s retirement security. However, every time she was asked all we got were excuses and vague promises,” said Phillips.
“She promised to release a report that the government’s actually been sitting on for a couple of years. She did not release that report and by all accounts that report will be an entirely made-up way of trying to convince Albertans that pulling out of CPP is a good idea,” added Phillips.
She said there is no evidence to prove that an Alberta pension plan would save employers and workers money on contributions.
“Any evidence they release now will have to be regarded as pretty suspect at this point,” the MLA said.
The NDP, she said, promised to protect CPP during the election and now a month later Smith needs to commit to protecting the pension plan.
“Her previous mandate letters to her ministers included explicit references to the creation of the Alberta Pension Plan and pulling Alberta out of the CPP,” said Phillips.
“Albertans deserve to know where this going and they deserve to have all the facts,” said Phillips noting that new analysis of major global pension funds by research firm Global SWF shows CPP is No. 1 in the world for retirement savings.
“They also looked at AIMCO, they looked at the Ontario municipal and a few other pension funds” with AIMCO ranking in 17th. AIMCO is the province’s investment management corporation.
“When it comes to pensions, Danielle Smith does not know what she’s talking about and it’s high time she backed down on this plan.”
CPP ensures a secure retirement, promoting social and economic stability across the province including here in Lethbridge which has a large number of retired people, she said.
“There is that reliable and predictable source of income during retirement and by pooling contributions from workers across Canada and now for 60 years, the CPP has that strong foundation for retirement security. It minimizes risk. This is especially crucial considering the uncertainties surrounding private pension plans and the fluctuating nature of investment returns worldwide,” said Phillips.
“Being first is an asset in this regard.”
The CPP’s flexibility is particularly important for worker’s in today’s mobile “and dynamic job market,” she said.
“Why would anyone want to come here? Why would anyone continue to believe Alberta is calling if they can’t bring their pension with them,” she asked.
The CPP offers economies of scale and professional investment management which means higher retirement benefits and lower costs for Canadians, she said.
“Numerous studies have shown that creating an Albertan Pension Plan will cost hundreds of millions of dollars to administer. In fact, it may go into the billions of dollars,” said Phillips noting that 4.5 million Albertans isn’t 40 million Canadians.
“There is an economy of scale that Alberta simply by virtue of the fact that we have 4.5 million people here. We cannot achieve it like we can to the level of the CPP.”
Phillips said Albertans retirement is too important to gamble and the CPP is the most risk-free investment people are making in their retirement security.
“The premier also needs to de-risk our retirement,de-risk the retirement of all Albertans” who want to work elsewhere and Canadians who want to relocate to this province.
“The premier should just come out right now and say yes or no. It’s time to end the speculation.”
Leaving the CPP is more complicated than changing the constitution, said Phillips and it was set up that way “in order to protect against rogue political actors.”
She said it will take three years to even start negotiations, calling it a make-work project for lawyers with some estimates going into the billions of dollars for the liability that Alberta would have to take on.
CPP is “a creature of the provinces,” she said.
According to website Abpolecon.ca, the pension plan legislation allows a province to withdraw if it sets up an alternative. But an Alberta plan would inherit liabilities for all benefits that workers earned while working in the province since CPP was started in 1966.
A request to the UCP for comment was not returned by deadline. Follow @albeebHerald on Twitter 4
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