ALBERTA IS NOT QUEBEC

Varcoe: Replacing CPP, new Alberta revenue agency, surplus plan are priorities for finance minister
SHE HAS NO MANDATE
These complex issues are included in the ministerial mandate letter that Premier Danielle Smith handed to Travis Toews

DON'T TOUCH MY CPP

CALL AN ELECTION

Author of the article: Chris Varcoe • Calgary Herald
Publishing date: Nov 16, 2022

Premier Danielle Smith has given Finance Minister a long to-do list.

 Darren Makowichuk/Postmedia

Examine the idea of a new Alberta Pension Plan.

Come up with a strategy on how to allocate future budget surpluses and deal with debt reduction.

The list of new chores facing Finance Minister Travis Toews is daunting, about as simple as mastering quantum computing with a Commodore 64 and a dial-up modem.

These complex issues are included in the ministerial mandate letter that Premier Danielle Smith handed her new finance minister — who is also the former finance minister, and the runner-up in the UCP leader race — this week.

“Well, it’s true, there’s nothing simple about any one of the three,” Toews said in an interview.

“None of them are straightforward issues, again, and yet all quite unique . . . It’s very feasible to have a debt retirement plan and present that to Albertans and get support of government for that.

“With respect to an Alberta Pension Plan, an Alberta Revenue Agency, much more complex — and, look, the fact that these issues are complex should not circumvent government from pursuing the concepts.”

That’s one way to view it.

Here’s another.

“Those are incredibly unpopular ideas,” said political scientist Duane Bratt at Mount Royal University, noting the idea of replacing the Canada Pension Plan (CPP) and developing a provincial revenue agency were examined by the Kenney government’s Fair Deal Panel in 2020.

“Mandate letters are signalling . . . and this is totally consistent with (Smith’s) view that we need more Alberta and less Ottawa.”

The new letter hands Toews several complicated tasks, including a call to work with the UCP caucus to develop a new fiscal framework and surplus strategy.

It’s something that has devilled Alberta governments since Ralph Klein was premier: What should Alberta do with future budget surpluses?

The province expects to post a $13.2-billion surplus this fiscal year. It’s already committed to allocating more than $13 billion to debt repayment.

The letter calls on Toews to work with the cabinet and develop a plan to balance “sustainable debt reduction, savings and infrastructure investment, while addressing inflationary and other affordability pressures.”

The other ideas are more combustible.

The mandate letter calls on the finance minister to “review and provide recommendations regarding an Alberta Pension Plan (APP) that will increase pension benefits for seniors and reduce premiums for workers.”

Similarly, it seeks recommendations on creating a provincial revenue agency to collect all Alberta taxes, including personal income taxes.

Two years ago, the Fair Deal Panel recommended the province withdraw from the Canada Pension Plan (CPP) and create a replacement. It also advocated giving Albertans the opportunity to vote on the idea through a referendum.

With higher average income levels in the province, a younger population (relative to the rest of the country) and elevated rates of employment, “Albertans contribute disproportionately to the CPP,” the report stated.

The panel said withdrawing from CPP could see the provincial contribution rate reduced from current levels while keeping pension benefits at a comparable amount.

However, it contained a note of caution.

“Many seniors unequivocally told the panel: make sure pensioners are protected!” it said.

A poll of Albertans last month for CBC by Trend Research, under the direction of Janet Brown Opinion Research, underscores such concern.

It found three in 10 respondents think the province should create a pension plan to replace CPP. Six in 10 were opposed.

The poll also indicated 57 per cent of UCP supporters agreed with establishing an APP, while one-third disagreed.

“We have this situation where (Smith) got elected by appealing to a certain part of the population that thinks this is a good idea,” Brown said in an interview.

“She’s now trying to drive down the middle of the road, where she’s trying to fulfil the promises she made in the leadership race, but set herself up to win the next election.”



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Toews said the province will consider whether it should continue to be part of the CPP or put a provincial plan in place. Any Alberta plan would have to ensure comparable pension benefits and be transferable across the country.

“It’s a very complex topic. We’ve been doing the actuarial work, the econometric work, and we’re looking forward to sharing the conclusions . . . in the weeks ahead,” he said Tuesday.

“Personally, I think an Alberta Pension Plan holds great promise.”