On November 9, 2019, Alberta Premier Jason Kenney announced the creation of a Fair Deal Panel, chaired by former federal Reform Party leader, Preston Manning. The Government news release says the panel will consult Albertans on how best to define and secure a fair deal for Alberta, and how to best advance the province’s economic interests. The panel has a $650,000 budget, will hold a minimum of seven open houses and is expected to report back to the government by March 31, 2020.
The panel, through public meetings and engaging experts, will look at:
- Establishing an Alberta Constitution;
- Leaving the current Canada-Alberta Tax Collection Agreement and establishing a provincial revenue agency to collect provincial taxes directly;
- Withdrawing from the Canada Pension Plan and creating an Alberta Pension Plan, and moving an estimated $40B in Albertans pension contributions into the Alberta plan.
- Establishing a provincial police force, similar to the Ontario Provincial Police;
- Seeking Alberta representation in international relations, similar to Quebec’s relationship with Canada.
- Emulating Québec’s legal requirement that public bodies, including municipalities and school boards, obtain the approval of the provincial government before they can enter into agreements with the federal government.
- Using the existing provincial power to appoint the Chief Firearms Office for Alberta.
- Opting out of federal cost share programs with full compensation.
- Seeking an exchange of tax points for federal cash transfers under the Canada Health and Social Transfers. Alberta currently receives $6.4 Billion from these programs.
Some of this ground was covered in a 2003 Alberta MLA Committee tasked with reviewing and reporting on Strengthening Alberta’s Role in Confederation. In its final recommendations, the Committee said that withdrawing from the Canada Pension Plan and creating a separate Alberta pension plan “is not in the best interests of Albertans”. Further, the Committee stated collected our own personal income taxes would mean “higher out-of-pocket costs” for individuals and businesses, a statement that has been echoed by the Calgary Chamber of Commerce this week.
It is assumed an Alberta Pension Plan would have a similar structure as the Québec Pension Plan (QPP), which is a compulsory public insurance plan for workers age 18 and over whose annual employment income is greater than $3500. Its purpose is to provide persons who work in Québec (or have worked in Québec) and their families with basic financial protection in the event of retirement, death or disability. The QPP is managed by the Caisse de dépôt et placement du Québec. The Canada and Quebec Pension Plans have aligned contributions rates and benefit levels to ensure full “portability”.
There are, as of yet, no hard cost estimates for setting up such a plan in Alberta, nor the costs that the province would have to absorb to manage the plan and the investments and disbursements. A Star Calgary article quotes Tammy Schirle, an economics professor at Wilfrid Laurier University saying, “Alberta could set up a functioning pension fund management system on its own that is capable of matching the returns of the Canada Pension Plan Investment Board. However, such a plan would require Albertans to pay in more because of the province’s traditional boom-bust economy. During the good years, contributions to an Alberta pension plan wouldn’t be affected. But a major economic downturn would mean fewer Albertans are working and paying into the pension plan; therefore, the plan would need to have a higher contribution rate to offset bad years. Running a pension plan across the entire country helps to avoid these issues.”
As the Fair Deal Panel is just starting, we will have more details as the open houses and work gets underway. We will keep you informed as we learn more.
— Catherine Keill, Keill & Co