{"id":17457,"date":"2019-11-08T09:15:44","date_gmt":"2019-11-08T14:15:44","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/alberta-will-study-already-compelling-case-for-its-exit-from-cpp-kenney-138701"},"modified":"2019-11-08T09:15:44","modified_gmt":"2019-11-08T14:15:44","slug":"alberta-will-study-already-compelling-case-for-its-exit-from-cpp-kenney","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/11\/08\/alberta-will-study-already-compelling-case-for-its-exit-from-cpp-kenney\/","title":{"rendered":"Alberta will study already \u2018compelling case\u2019 for its exit from CPP: Kenney"},"content":{"rendered":"\n
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Andy Blatchford, The Canadian Press<\/span>  | November 8, 2019<\/p>\n

Alberta Premier Jason Kenney says there\u2019s a \u201ccompelling case\u201d to be made for his province to exit the half-century-old Canada Pension Plan, an idea sure to face increasing scrutiny over the coming months.<\/p>\n

With growing frustrations in his province about its place in the federation, Kenney has revealed that a deeper analysis is on the way to consider Alberta\u2019s potential withdrawal from the national pension plan.<\/p>\n

The move, if it goes forward, would pull Albertans\u2019 multibillion-dollar share from the $400-billion pool of assets that are handled by the investment manager, the Canada Pension Plan Investment Board. The proposed departure, said Kenney, will be examined by a panel his government intends to create as a way to assess \u201cfairness\u201d for Alberta within the federation.<\/p>\n

Read: Editorial: Federal election promises must focus on Canada\u2019s evolving workforce<\/a> <\/strong><\/p>\n

Talk of the CPP withdrawal follows a federal election result late last month that many say exemplified Prairie frustration toward the Liberal government in Ottawa. The federal Liberals were reduced to a minority mandate after failing to capture a single seat in Alberta or Saskatchewan.<\/p>\n

There\u2019s also been momentum behind separatist sentiments in the two resource-dependent provinces, where their economies have struggled through a commodity downturn. Much of the anger has been directed at Ottawa and other parts of Canada, which are accused of preventing the landlocked Prairie provinces from getting their natural resources to the coast for export.<\/p>\n

Now, Kenney is ready to take a long look at ditching the CPP, which has been in place everywhere in Canada, except Quebec, since the mid-1960s. Quebec has been managing its own sister pension plan. \u201cI can certainly tell you that will be one of the issues studied by the panel that I will be appointing to consult with Albertans on fighting for a fair deal in Canada,\u201d the Alberta premier said in a recent video clip, which was posted last week on Facebook. \u201cI believe that a compelling case can be made for such a shift.\u201d<\/p>\n

In his message, Kenney said he understands about $40 billion worth of Albertans\u2019 premiums are managed by the CPPIB. He said the funds, if pulled from the CPPIB, would be transferred to the Alberta Investment Management Corp. The institutional investor, which includes the province\u2019s public-sector pension plans, already manages about $100 billion in assets for Alberta taxpayers, he said.<\/p>\n

Read: Can CPP have a provincial bias?<\/a><\/strong><\/p>\n

With Alberta home to Canada\u2019s youngest population, he added it\u2019s the biggest net contributor to the CPP. \u201cLet me underscore, our government has not made any decision in this respect, but it is certainly one of the ideas that people will be presenting to our panel on fairness within the federation,\u201d said Kenney.<\/p>\n

The premier argued the extra funds would enable the AIMCo to diversify further and potentially improve the returns over time. Kenney also noted that Quebec has responsibly managed its own pension plan outside of CPP for decades.<\/p>\n

Bill Morneau, who is widely expected to stay in his role as finance minister once Prime Minister Justin Trudeau forms his new cabinet on Nov. 20, was asked Thursday whether Alberta should be able to leave the plan. \u201cI think there will be more that we\u2019ll have to discuss after Nov. 20 and we\u2019re looking forward to having those discussions,\u201d he said in Ottawa on his way to a post-election meeting of current and defeated Liberal MPs.<\/p>\n

Kevin Milligan, a University of British Columbia economist, said Alberta\u2019s proposed exit from the CPP should be taken seriously given it\u2019s coming from the premier. Any push by Alberta to abandon the CPP is a much more credible suggestion than the debate about equalization, given the pension plan is a joint federal-provincial project with exit provisions, while equalization is a federal program, he said.<\/p>\n

Read: \u2018Exciting time for retirement\u2019 as CPP deal signals premium boost to 5.95%<\/a><\/strong><\/p>\n

\u201cI do wonder what the goal of this is,\u201d said Milligan. \u201cAlberta could certainly do this, it is in their rights to do so. But in doing so they would have to set up their own administration, set up their own benefits . . . and these things are not cost-free.\u201d<\/p>\n

The QPP comparison, he added, is difficult to make because trying to undo the CPP arrangement now, after decades, would be far more complicated than at the outset. Milligan also said, from the future of the pension plan\u2019s standpoint, a threat by Alberta to leave the CPP is unlikely to cause considerable concerns in the rest of the country. Actuarial projections, he added, show the CPP is tens of billions of dollars ahead right now than where it should be.<\/p>\n

\u201cThe idea that this would be a way to get people in the rest of Canada, to poke them in the eye, I\u2019m not sure that\u2019s true in terms of the fact [the CPP] is in pretty good shape right now,\u201d he said.<\/p>\n

Keith Ambachtsheer, director emeritus of the University of Toronto\u2019s Rotman International Centre for Pension Management, said he sees no economic argument for Alberta to exit the CPP and that it would be purely a political decision. \u201cThere\u2019s nothing in it for the Alberta taxpayer. So, it\u2019s pure spite. I think it\u2019s important that people understand there\u2019s a difference between bluster and hard, economic analysis.\u201d<\/p>\n

A spokesman for the independent CPPIB declined to comment about Alberta\u2019s exit proposal.<\/p>\n

Read: A look at Alberta\u2019s incoming joint pension governance structure<\/a><\/strong><\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Andy Blatchford, The Canadian Press  | November 8, 2019 Alberta Premier Jason Kenney says there\u2019s a \u201ccompelling case\u201d to be made for his province to exit the half-century-old Canada Pension Plan, an idea sure to...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17457"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=17457"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17457\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=17457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=17457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=17457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}