On Thursday 14 November, I gave the following presentation to about 130 Calgarians
concerned about the future security of their Canada Pension Plan (CPP).
My intention was to provide a context to the recent interest of the UCP in fixing a
problem that does not require fixing- that is Albertans’ entitlement to benefits under the
$650-billion CPP.

The idea of Alberta exiting the CPP is not new. This idea was floated by the Western
Canada Concept in the early 1980s. This was a time when western separatism was at
its peak after the National Energy Plan. This idea then resurfaced after changes were
made to the nature of the CPP which resulted in the formation of an independently
managed Canada Pension Plan Investment Board when the plan was put on a sounder
basis. These changes triggered the idea that Alberta and Albertans were being
penalized by the increased premiums. The concept of Alberta going on its own
resurfaced in the famous (or infamous) firewall letter sent by Stephen Harper, Ted
Morton and others to Premier Klein in 2000 advocating that Alberta reduce its
dependence on Ottawa. Other ideas included at the time was a separate police force
and revenue collection agency.

These ideas were explored by Jason Kenney’s “Fair Deal panel” in 2019-20 who
recommended the government explore the idea of an Alberta Pension Plan.
Fast forward to September 2023, fresh after a new election victory which included
Premier Smith’s statement she would “not touch pensions,” and an “independent report”
by Lifeworks claimed that an Alberta withdrawal would mean Alberta would receive
$334-billion of the CPP or over 53 per cent of the fund. This questionable finding
allowed the government to claim it could lower premiums for employers, the self-
employed, and employees up to $1,425 annually. In addition, the government claimed
that it would also offer bonuses to retiring seniors of $5,000-$10,000.

In addition to what looked like political bribes in the context of strong opposition to the
plan, the government pledged to “engage” the public with an engagement panel led by
former Treasurer Jim Dinning. According to Election Alberta records Dinning has given
over $20,0000 to the UCP since 2017, including $5600 in 2022, the year in which Jason
Kenney was deposed. The engagement panel’s slick marketing campaign, at a cost of
roughly $7-million to Alberta taxpayers, included the slogan “More Alberta, Less
Ottawa.”

I then talked about the origins of the Canada Pension Plan in the mid-1960s. This was
the golden age of “co-operative federalism” when political leaders like Lester Pearson,
John Robarts of Ontario and Ernest Manning saw an opportunity to strengthen the
social safety net. Other reforms during the period included medicare. Unfortunately,

that spirit of forging a Canadian identity through shared social programs has
degenerated into a mean-spirited attack on other Canadians which the APP represents.
The greatest danger of the Smith government successfully withdrawing from the CPP is
the continuing politicization of investment management. Although the Canada Pension
Plan Investment Board (CPPIB) and its managers are statutorily insulated from political
interference from both federal and provincial/territorial governments, the independence
of Alberta’s investment manager, Alberta Investment Management Corporation (AIMCo)
is by no means assured.

The politicization of pensions by the UCP began early in their tenure when in the fall of
2019, Bill 22 swept the assets of the Alberta Teachers’ Retirement Fund and the
Workers’ Compensation Board into AIMCo. This action was done without any prior
consultation. In addition, joint pension governance reforms legislated by the NDP, which
gave public sector pension plans the option to look elsewhere for investment
management services after a five-year transition period, was repealed. Nowhere were
these ideas found in the UCP’s election platform Alberta Strong and Free.

However, politicization of AIMCo has now reached a new level. Two weeks ago, the
UCP fired the entire 10-person board of directors of AIMCo and let go the CEO and
three other senior executives. The measure appointed Nate Horner the Finance Minister
as chair of AIMCo and a senior bureaucrat, with zero investment management
experience was appointed CEO, who is expected to “stabilize” AIMCo. This is not the
first time that the Smith government has fired boards of directors. In November 2022,
shortly after becoming Premier, she fired the board of Alberta Health Services. On top of
this was the rumour that former prime minister Stephen Harper was to be appointed
chair of AIMCo to replace Horner.

The mixing of politics and investment management in all probability means that AIMCo
will be directed to use public funds in the Heritage Fund to support the energy sector.
More worrisome is whether this bias will extend to the management of public sector
pension funds. In addition, should the Alberta government proceed with its proposed
CPP withdrawal plans, would future governmens be tempted to use these moneys to
advance their political agenda?

As Brad Lafortune and I wrote in a Calgary Herald oped this past weekend
The politicization of pensions, like health services, is dangerous public policy that
threatens the retirement security of all Albertans. We believe the best pension
plans and investment management corporations are those free of political
influence.

(For my slides, please click here.)