Rosalind Evans
The newly appointed Finance Minister of Alberta, Nate Horner, has been directed by Premier Danielle Smith to keep pursuing a separate pension plan and tax collection agency for Alberta.
A mandate letter made public by Smith instructed Horner to lessen dependence on Ottawa by considering these two options.
Smith’s letter outlines the two main actions Horner should focus on:
1. Unveiling the report on the Alberta Pension Plan and consulting with Albertans about its findings to decide whether a referendum is needed to create an Alberta Pension Plan that could increase pension benefits for seniors, reduce premiums for workers, and safeguard the pension benefits and interests of all Albertans.
2. Evaluating the feasibility and benefits of setting up an Alberta Revenue Agency for collecting all provincial tax revenues and developing a comprehensive strategy for its implementation if the government decides to pursue this route.
Smith had given similar instructions to the previous finance minister, Travis Toews when she assumed office as Premier in late 2022.
The proposed ideas faced criticism when first announced last year.
In a conversation with Global News, Horner stressed that both proposals are not final but merely part of an investigative process.
“All these efforts are constructive. If it poses an opportunity for the province, we ought to explore it,” he stated, emphasizing the need to consider all factors, particularly those with practical implications for Albertans.
Though he didn’t specify a timeline, Horner anticipates that the report will be made public soon.
Contrary to this, Moshe Lander, an economist from Concordia University, asserts that neither an Alberta-specific pension plan nor a revenue agency would benefit Albertans.
He criticized the selling point of these proposals, doubting the projected cost savings and calling it “bad economics but good politics.”
Lander further noted that good politics often trumps good economics. He was skeptical about the average Albertan voting for a provincial-specific pension plan due to the associated administrative costs and complexities.
Horner, however, emphasized the importance of considering all opportunities available to provinces.
“The Fair Deal Panel was set up to explore potential opportunities,” he added. “Alberta has long been a significant contributor to the Canadian economy, and the question regarding the pension plan is whether keeping these assets separate could reduce premiums and increase benefits.”
Peter Salomon, a retired accountant from Quebec and now residing in Alberta, opposes the idea of Alberta adopting a similar system to the Quebec Pension Plan or Revenu Québec.
He warned that this would be a regressive step that could lead to more financial risk for him and his family. “Diversification is a key aspect of successful investing, and the Canada Pension Plan provides diversification at a national level rather than a provincial one,” he added.
Salomon said a provincial pension plan would be less resilient during economic downturns and expressed skepticism about its management.
Meanwhile, the Alberta NDP has termed the mandate letter disastrous for Albertan retirees’ savings.
“Implementing this plan will cost taxpayers hundreds of millions while putting every Canadian’s retirement at risk,” stated NDP Finance Critic Shannon Phillips.
“Albertans should be worried about the Premier’s peculiar fixation on taking control of their retirement savings,” she added.
Amid this ongoing debate, it is clear that the implications of establishing an Alberta-specific pension plan and tax collection agency continue to divide opinions. Only time will tell whether these initiatives will be seen as valuable ways to gain more control over provincial resources or as unnecessary risks that could threaten the financial stability of Albertans. Regardless of the outcome, the discussions sparked by these proposals will undoubtedly play a pivotal role in shaping the future economic policies of Alberta.
