Danielle Smith’s pension numbers are far above UCP’s previous accounts
EDMONTON – The amount UCP Leader Danielle Smith says Alberta could get by withdrawing from the Canada Pension Plan (CPP) is vastly out of step with the amounts previously touted by the UCP, which shows the goal of their report has been to use the fabricated dollar figure for politically-driven grandstanding, says Gil McGowan, president of the Alberta Federation of Labour.
“In four years, the amount the UCP says we could get from withdrawing from the CPP has grown more than eight-fold,” says McGowan. “It’s unlikely that the UCP previously got its math wrong. The more likely explanation is that the Danielle Smith government torqued the numbers to pick a fight with the federal government, rather than try to protect the retirement security of Albertans.”
McGowan points to a 2019 briefing note from the Treasury Board and Finance that states, “Alberta’s share of these amounts [CPP assets] is estimated to be $32.5 billion”. Also in 2019, then-premier Jason Kenney stated Alberta’s share of the CPP assets was “about $40 billion.” In 2020, the “Fair Deal” Panel told Albertans it was “estimated to be between $40-$70 billion.” This year, Danielle Smith uses the figure from a third-party vendor to try to convince us we’re owed $334 billion, or more than half of CPP’s base assets.
“Until now, the UCP contended that if they were to pull Albertans’ retirement security out of CPP, Albertans would get an amount close to our contribution level, which is around 16 per cent,” says McGowan. “With Danielle Smith at the helm, that number has jumped to an incredible $334 billion, or more than eight times the amount they previously used.”
“Lifeworks, the third-party vendor the UCP used to get this wildly inflated number didn’t even show up at the news conference where this was announced to defend it, nor did the author put their name on the report citing “privacy.” Absurdly, the author contended that a “literal reading of the Legislation” meant that Alberta could be owed more than the entire CPP: $747 billion, or 118 per cent of base assets,” says McGowan.
“The CPP is stable partly because of its size, but also because its investment decisions are independent and not subject to the whims of politicians. Keeping politicians away from investment decisions in the structure of any pension is fundamental to its security,” says McGowan. “No matter which numbers you use, whether its $40 billion or $334 billion, an Alberta-only pension would be smaller than the CPP, therefore less stable and higher risk. Danielle Smith has said on multiple occasions that she wants to have a say in how investments are made. Politicians, no matter their stripe, should not be in charge of where workers’ retirement security is invested. Leave that to investment professionals to maximize returns for workers.”
“There’s really only one explanation for the inconsistent and grossly-inflated numbers being pushed in front of Albertans by Danielle Smith and the UCP: this is about politics. This is about attempting to pick a fight with the federal government for political points and gaining control of workers’ retirement security.”
A copy of the aforementioned 2019 Treasury Board and Finance briefing note will be sent upon request.
Director of Communications, AFL