LAKELAND – A group hosting discussions focusing on the advantages of an Alberta Pension Plan is making its way through the Lakeland.
On April 5, an event was held in St. Paul, with about 100 people attending. A similar event was also held in Lac La Biche on April 8.
Alberta First Pension describes itself as a grassroots non-partisan initiative, with the goal of collecting 200,000 signatures to present to the provincial government and push for a referendum on an Alberta Pension Plan (APP).
Also in attendance was Bonnyville-Cold Lake-St. Paul UCP Constituency Association president Mitch Sylvestre, a sponsor of the event, and who also spoke in favour of the APP.
At the St. Paul session, Sylvestre said the issue is about dollars and cents, not political affiliations or associations.
“This is a non-partisan thing,” he said, explaining that the amount of money the CPP collects from Albertans is disproportionate to the money it pays Alberta’s seniors. Sylvestre told the St. Paul crowd that his numbers show that Alberta currently pays $9 billion into the CPP and collects around $6 billion. He believes the $3 billion difference could be utilized by Albertans.
Tanner Hnidey was a speaker at the St. Paul event that took place at the Centennial Seniors Centre. He spoke in favour of the APP, relaying his thoughts on the advantages the APP could potentially bring to Albertans. He also answered questions from the audience.
According to information distributed at the meetings and from online background, Hnidey describes himself as an economist as well as a commenter on religion, politics and economics.
Talking about an APP
A major concern among many Albertans when speaking about a switch from the Canada Pension Plan (CPP) to an APP is the possibility their pension could be negatively affected. Hnidey says the APP cannot legally take away pensions, explaining that to leave the CPP, the APP must guarantee the same or better pension benefits.
“One of the rules for leaving is you have to guarantee as a province, that seniors, younger individuals... will not be adversely affected,” says Hnidey. So, pension checks will not decrease if ever there is a switch to an APP.
“So, do we have to worry about the transition period? No. We have to be vigilant to make sure the government gets it right, absolutely. But it's not an instantaneous thing, and will not catch us by surprise,” says Hnidey.
Due to pension portability, retirees will also still receive pensions if ever they relocate away from Alberta.
He also believes that Albertans disproportionately contribute to the CPP. Albertans’ net contribution to the CPP is around $3 billion to CPP each year, he says, citing a Fraser Institute study.
According to a Fraser Institute study released in April 2019, 16.5 per cent of the total contributions to the CPP in 2017 are from Albertans, while retirees received 10.6 percent, resulting in a net contribution of $2.9 billion. From 2008-2017, the study indicates Alberta’s cumulative net contribution is $27.9 billion to the CPP.
A reason for disproportionate contribution includes Alberta’s larger working population, according to the study.
“I do not believe we are treating our seniors fairly as it stands,” says Hnidey. “We have an obligation to take care of them, and right now... it’s certainly not being fulfilled, not when you look at the economic situation in this country.”
Hnidey says that those pro-CPP argue that the CPP earns around 10 per cent rate of return in investment (ROI) over 10 years, and that it would be foolish to leave.
But Hnidey believes there is no correlation to how much the CPP performs and how much pension retirees get. While the CPP may have a 10 per cent ROI over 10 years, retirees only receive around three per cent in ROI, he says.
“Would that change with an [APP]? It would,” argues Hnidey.
He believes that with an APP, Albertans could receive a pension proportionate to the APP’s ROI. But that requires maximized profit, which would then require an administrative or managing body completely independent from the provincial or federal governments.
This independent body will be mandated to maximize profits and if they were found to not be fulfilling their mandate, Albertans could choose to have them replaced.
“If a provincial government... is the one doing the investment, I don’t want it,” says Hnidey, because a government is not mandated to maximize profit.
Hnidey's idea is to have an independent institution not compromised by politics or social agendas. This institution will act like private investment managers, mandated to maximize “returns on your contributions and make sure those returns are there for you when you retire.”
Why do other Canadians want Alberta to stay?
Asked why other provinces want Alberta to stay in the APP, Hnidey points back to Alberta’s annual contribution to the CPP.
“If Canada lost Alberta, then of course, that payment of $3 billion or [$2.5] billion would go as well. It would come with us. It would stay in Alberta,” he says.
Also, if Alberta leaves the CPP, Hnidey believes Alberta has a stake from the CPP’s $595 billion assets collected since the CPP’s creation. He recognizes that there are arguments as to how much that slice would be.
Hnidey says leaving the CPP would not be done out of spite, but because “We believe it increases our quality of life.”
To help others, Alberta must help itself first, he says.
A task force created by the Government of Alberta to collect public feedback on a provincial pension plan wrapped up its series of community consultations at the end of 2023. A report on those engagements is expected in the coming weeks.
