Braid: Canada Pension Plan says flat 'NO!' to Alberta claim on half of CPP assets

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Without a gun, a mask and a note to the teller, there’s no way one province can demand half the national pension fund and hope to escape with the loot.

The report on an Alberta pension plan says the province is entitled to $334 billion from the Canada Pension Plan. That is 53 per cent of all the funds held by the Canada Pension Plan Investment Board.

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The money would simply be transferred to a new Alberta pension authority, at least in the dreams of Premier Danielle Smith and her government.

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The flat “no” came quickly from Michel Leduc, senior global communication director for CPP Investments, the governing board.

“We respect the right of Albertans to consider withdrawing from the Canada Pension Plan, however, the amount the report says could be extracted from the CPP is impossible and based on an invented formula.

“References to how much a province might claim from the CPP Fund should be regarded with caution and a high degree of skepticism until many issues are resolved between federal and provincial governments.

“Any idea of a withdrawal from the CPP would be complex, fiercely disputed, involve political posturing and would result in risk for Albertans for years to come. The best way to protect the financial security of Albertans during one of the most vulnerable times of their lives is to preserve a national fund.”

There’s no wiggle room in that statement, no suggestion that maybe we can talk, let’s see a lower offer. And it carries the charge that Alberta’s whole claim is bogus (“based on an invented formula”).

Even though the CPP is an independent entity, you can bet the federal government will back the sentiment. Even a Conservative national government would be unlikely to back this idea as it stands.

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The Alberta plan is all preliminary pending a wide consultation possibly ending with a provincial referendum. But Smith is already sold on it — she said so Thursday. Her ideas have a dogged way of moving ahead.

There’s lots of talk in the report about the benefits to Albertans — lower pension premiums, the same or higher benefits at retirement — but scant analysis of what would happen outside Alberta.

And the impact makes this a complete political impossibility for any federal government.

If Alberta by some miracle extracts one-third of a trillion dollars, Canadians elsewhere would have to pay more to sustain their severely truncated pension account.

Smith says that would amount to about $175 per contributor per year. That estimate could well be very low.

Albertans, by contrast, would each pay $1,425 less per year.

In Vancouver or Winnipeg or Toronto, it will be noted that Alberta is roughly 10 per cent of Canada — one of 10 provinces, with just over 10 per cent of the national population.

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And now, the province wants 53 per cent of all the national pension money.

The Alberta response is that provincial contributors have historically paid far more into the CPP than any other Canadians. Based on a formula in federal law — now disputed by the CPP board — that can be seen as $334 billion.

Former treasurer Jim Dinning, who will lead the review panel, articulates the key part of the dream. He says a provincial fund of such magnitude would turn Alberta into a genuine financial powerhouse with great capacity to foster growth and attract more capital.

Dinning once opposed the pension idea but now says, “the ability to change your mind shows you have one.”

He also said years ago, referring to a policy matter, “that dog won’t hunt.”

Now, Dinning is going to walk this dog around the province. Albertans may give it a friendly scratch behind the ear, but it’s no hunter.

Don Braid’s column appears regularly in the Herald.

X: @DonBraid

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