Bad idea to mess with CPP

Opinion

Hey there, time traveller!
This article was published 25/09/2023 (741 days ago), so information in it may no longer be current.

Some days, you hear a piece of news and think, “This is not going to end well.”

Alberta, this is not going to end well.

Last week, Alberta’s provincial government started moving forward on something they hadn’t bothered to discuss with their province’s voters during their campaign the last election: pulling that province out of the Canada Pension Plan, and going it alone.

But not just going it alone: going it alone with a huge block of the CPP’s base assets, equivalent to 53 per cent of those assets, or $334 billion. (For comparison’s sake, since the plan began, Alberta workers and businesses have paid in just 16 per cent of the fund’s total contributions.)

That’s the amount of money that a consulting company’s report on the proposal says Alberta could claim by pulling out of the plan.

Not everyone agrees with the consultants’ position: they weren’t following CPP’s legislation while coming up with their calculations, and the CPP’s investment arm told The Globe and Mail that the consultants had used “an invented formula” to come up with the figures, adding, “We truly can’t connect it to anything that we believe has any legal or actuarial reasons.”

But whether Alberta’s government feels it can claim 53 per cent of the funds or 16 per cent, here’s the simple thing: it’s not Alberta’s money.

It’s money that belongs to individual Canadians — some of them in Alberta, many more in other provinces — collected on a 50-50 basis from employees and their employers, to provide a basic retirement pension. The funds are handled by an independent board that seeks to get the best investment return possible, a board that is not influenced by politicians seeking an investment pool to fund their own pet projects.

It spreads the risks of investments, and the demographic risks, across all of the country (except Quebec, which started its own plan when the CPP was launched) making it much more able to handle the regular headwinds of the global economy.

There is an argument to be made that Alberta — and to a lesser but still significant degree Saskatchewan — has displaced Quebec and taken on the mantle of Canada’s whiniest province. It often seems that Saskatchewan and Alberta spend more time blaming others for their ills than trying to cogently address them.

And maybe that’s what this is, too: perhaps just the latest salvo in the endless “Blame Ottawa” cannonade, trundled out to distract Albertans from their provincial government’s flailings on other issues.

It’s hard to say.

Hare-brained ideas seem to be the watchword in Alberta right now — and that’s fine, as long as they only affect the Alberta voters who elected the Alberta United Conservative Party.

But moving to fracture the Canada Pension Plan is a very bad idea, one that would divide Canadians on something that most of this country depends on — a stable, albeit small, old age pension.

Premier Danielle Smith might want to stop and think about the risks of stirring up the passions of some of the most consistent voters in the country — older Canadians.

Smith may not remember the groundswell of protest that arose in 1985 when then-prime minister Brian Mulroney moved to de-index pensions, after promising he wouldn’t.

Smith might not remember the name Solange Denis, either. Denis confronted Mulroney In front of the Parliament buildings, legendarily saying, “You lied to us… I was made to vote for you and it’s Goodbye Charlie Brown.”

Smith would do well to do a little research on that particular political experience.

Suffice to say, messing with CPP then was short lived.

It should be just as short lived now.