Several ideas have been tossed around for the New Deal for Alberta. .Most popular is opting out of the Equalization system, but this requires the consent of Ottawa and most provinces, and is therefore highly unlikely. .But some New Deal ideas Alberta can do on its own without permission from the federal government. This includes: creating its own police force, colleting is own taxes, controlling its own immigration, and creating its own pension plan to replace the CPP (Canada Pension Plan). .Provinces have the option to create their own pension plan, the equivalent of the Canada Pensions Plan. Quebec implemented its own plan QPP at the time the CPP was created in 1965, while all other provinces joined the federal program. .A plan set up by Alberta would guarantee all the promises now enshrined in the CPP for the retirement of Albertans. It would be more secure because of Alberta’s younger demographics..The CPP is managed not for the benefit of Albertans, but is controlled by the Laurentians in Toronto, Montreal and Ottawa, matching their demographic needs. .The Trudeau government has ordered the CPP to invest for the achievement of UN benchmarks. This causes investment decisions to be made not for goal of optimum returns, but for political ends. .The Canada Pension Plan has $400 billion administered on behalf of currently working Canadians and for the retirees already collecting. Whether it would be an easy process to the CPP with an APP is still up for debate. It is estimated that the province would be entitled to $40 Billion of the current CPP assets, based on the province having 10 per cent of the national. The annual pension contributions by Albertans into the CPP is currently over $8 billion a year. .By taking control of the pension plan, Alberta would be in a position to control the assets, set contribution rates, and set benefit rates, rather than Ottawa..Two recent investments point out how misguided the CPP currently is with its increasing focus on international political and development issues. One was an investment in low income housing in Mumbai, and the other was for an investment in Pattern Energy, an alternative energy company focusing on windmills. .Staying in the CPP requires Alberta workers to subsidize non-Alberta retirees. Alberta has a younger overall population, meaning that an APP would have proportionally more younger workers paying in, with fewer older retirees taking out. This would put an APP on a more solid actuarial foundation. .The APP’s assets and new funding would be directed into management under AIMCO, the fund management for government workers’ pensions worth $79 billion, and the Heritage Trust Fund worth $17 billion. .The federal government has made it clear that their plans for the future of Canada’s pensions is directly linked to infrastructure projects and objectives aligned with the United Nations, when its singular goal should be investment returns. .Unfortunately, AIMCO also appears to be a big player in sustainability investing. The major impetus for global sustainable funding is the UNPRI (UN Principles for Responsible Investment), which all major pensions in Canada participate in. .A change of direction needs to be made in how Canadians invest their money. It needs to be invested for the building of our own economy and focusing on wealth enhancement in Canada. Not for meeting political objectives. .Not only could the Alberta Pension Plan help build retirement wealth for Albertans, but it could possibly help to encourage the CPP to stop sending assets towards deals and investment that directly compete with the Canadian economy. .Bill Tufts is a pension expert and is speaking at Freedomtalk.ca in Red Deer on Nov 15 and 16.
