Alberta Premier Danielle Smith and federal Finance Minister Chrystia Freeland don’t have a lot in common. But they do share at least one view: that governments could play a bigger role directing pension investments to the benefit of domestic industries and economic priorities.
Canadians, no matter who they vote for, should be worried that these two political heavyweights share any common ground in this regard.
It became clearer in the federal budget last week as Ottawa appointed former Bank of Canada governor Stephen Poloz to lead a working group to explore “how to catalyze greater domestic investment opportunities for Canadian pension funds.” The group will examine how Canadian pension funds can spur innovation and drive economic growth, while still meeting fiduciary and actuarial responsibilities.
This idea has been in discussion since it was highlighted in the fall economic statement. In March, dozens of chief executives signed an open letter urging federal and provincial finance ministers to “amend the rules governing pension funds to encourage them to invest in Canada.”
Rewind to last fall, and it was Alberta’s plans that were dominating controversial pension discussions. As Ms. Smith championed Alberta going it alone, Canadians (including Albertans) were dumbfounded by her government’s claim the province could be entitled to 53 per cent of Canada Pension Plan assets – $334-billion of the plan’s expected $575-billion by 2027. The Premier has made the argument that starting with this nest egg, and with the province’s large working-age population, a separate Alberta plan could provide more in the way of benefits to seniors with lower premiums.
The main point of contention between the Smith government and Justin Trudeau’s Liberals has been what amount Alberta would take, should it exit the Canada Pension Plan. All parties are now waiting on Ottawa’s counter assessment; the Office of the Chief Actuary will provide a calculation sometime this fall.
But lost in this furious debate over that dollar amount is Ms. Smith’s desire to see the province have a say in how the pension contributions of Albertans are invested. The Premier has long expressed frustration that Canadian pension funds were being influenced by fossil-fuel divestment movements, and has suggested a separate Alberta pension plan could be a counterweight to this.
In addition, a key part of the promise for many supporters of the Alberta pension plan idea – including former premier Jason Kenney and pension panel chair Jim Dinning – has been the benefits that would accrue to the province’s financial services sector.
But just as the UCP government might see the potential of using the heft of pension assets to bolster the province’s energy sector, or to spur white-collar jobs in Calgary, the federal Liberals would like see more pension dollars directed toward Canadian AI, digital infrastructure and housing. These are some of the areas Ms. Freeland has directed Mr. Poloz’s working group to focus on.
Some would deem Mr. Freeland’s goals admirable. Tax dollars are already flowing to these sectors. It comes at a time of increasing concern about the housing crunch, Canada’s weak GDP numbers, and the fact that Canada’s economy is being carried along by strong population growth.
But many Canadians are already concerned with government priorities and federal spending. Many more would balk at governments picking winning industries with pension contributions. And governments change. A Conservative government, for instance, might have very different industries in mind for its own pension-fund working group – say, for instance, to make sure Canada doesn’t cede oil market share to Venezuela or the United States.
This pension working group is a convenient sweetener for a business community that has in many ways soured on this Liberal government. It comes at a moment when Ottawa is facing pushback – from technology entrepreneurs to doctors – to its proposed capital-gains tax hike.
It doesn’t appear Ottawa wants to go as far as recreating the CPP in the image of the Caisse de dépôt et placement du Québec, which has a formal mandate that includes contributing to the province’s economic development. And this isn’t to say there’s such a thing as complete neutrality in pension management now. The Canada Pension Plan Investment Board makes decisions open to debate and criticism. It should hear what governments and industry have to say, and setting up a couple of regional offices, beyond Toronto, could be helpful.
But if pension plans are formally burdened with policy imperatives from politicians, it could distract from the main goals of reasonable premiums and retirement security for Canadians. It could see the prioritization of being re-elected over returns. The regional and sectoral tug-of-wars over the cash would be never-ending.
There’s good reason to fear what an Alberta government would do should it take control of its citizens’ pension wealth. The same is most definitely true for Ottawa.
OTTAWA – Prime Minister Justin Trudeau says the NDP is caving to political pressure from Conservative Leader Pierre Poilievre when it comes to their stance on the consumer carbon price.
Trudeau says he believes Jagmeet Singh and the NDP care about the environment, but it’s “increasingly obvious” that they have “no idea” what to do about climate change.
On Thursday, Singh said the NDP is working on a plan that wouldn’t put the burden of fighting climate change on the backs of workers, but wouldn’t say if that plan would include a consumer carbon price.
Singh’s noncommittal position comes as the NDP tries to frame itself as a credible alternative to the Conservatives in the next federal election.
Poilievre responded to that by releasing a video, pointing out that the NDP has voted time and again in favour of the Liberals’ carbon price.
British Columbia Premier David Eby also changed his tune on Thursday, promising that a re-elected NDP government would scrap the long-standing carbon tax and shift the burden to “big polluters,” if the federal government dropped its requirements.
This report by The Canadian Press was first published Sept. 13, 2024.
Simon Jolin-Barrette, minister responsible for consumer protection, has tabled a bill to force merchants to calculate tips based on the price before tax.
That means on a restaurant bill of $100, suggested tips would be calculated based on $100, not on $114.98 after provincial and federal sales taxes are added.
The bill would also increase the rebate offered to consumers when the price of an item at the cash register is higher than the shelf price, to $15 from $10.
And it would force grocery stores offering a discounted price for several items to clearly list the unit price as well.
Businesses would also have to indicate whether taxes will be added to the price of food products.
This report by The Canadian Press was first published Sept. 12, 2024.
Quebec legislature member Youri Chassin has announced he’s leaving the Coalition Avenir Québec government to sit as an Independent.
He announced the decision shortly after writing an open letter criticizing Premier François Legault’s government for abandoning its principles of smaller government.
In the letter published in Le Journal de Montréal and Le Journal de Québec, Chassin accused the party of falling back on what he called the old formula of throwing money at problems instead of looking to do things differently.
Chassin says public services are more fragile than ever, despite rising spending that pushed the province to a record $11-billion deficit projected in the last budget.
He is the second CAQ member to leave the party in a little more than one week, after economy and energy minister Pierre Fitzgibbon announced Sept. 4 he would leave because he lost motivation to do his job.
Chassin says he has no intention of joining another party and will instead sit as an Independent until the end of his term.
He has represented the Saint-Jérôme riding since the CAQ rose to power in 2018, but has not served in cabinet.
This report by The Canadian Press was first published Sept. 12, 2024.
