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Albertans dread a Canada Pension Plan exit. Will Danielle Smith’s $334B claim fix that?

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Premier Danielle Smith may have wanted Alberta to go it alone on pensions for more than two decades, but to fulfil her dreams she’ll have to convert a wary Alberta public.

Polls have shown Albertans clearly don’t dream her dream with her. Pick your pollster: it was opposed by a margin of 31 per cent to 60 in a Janet Brown poll last October, or 21 per cent to 54 in Leger this spring.

With numbers like that, it’s a heftier turnaround task than persuading a majority of Quebecers to separate from Canada after decades of unwillingness. Or, for a local example, getting rural and small-town Albertans to suddenly prefer NDP over UCP.

Smith has the benefit of the premier’s bully pulpit to tilt public opinion in her favour on this one, to persuade people as she’s been arguing since at least 2003 that Alberta has “the obligation” to opt out of the Canada Pension Plan, and pay much lower premiums for equal or higher benefits.

She has now also armed herself with some of the biggest, rosiest numbers ever wielded in all the years of hardened conservatives trying to turn the public tide on the pension issue.

Billions upon billions

At the centre of her new argument is that eye-popping figure, $334 billion, which a government-commissioned report estimates Alberta is entitled to if it wants to become like Quebec, and separates from CPP.

That’s one-third of a trillion dollars, or more than half the CPP program’s total assets in a fund that collects contributions and pays out pensions of every Canadian who lives in a province that doesn’t start with Q.

For perspective, the amount Alberta is claiming as its rightful share of CPP is more than triple the ransom amount that Austin Powers film villain Dr. Evil demanded from world leaders, with pinky diabolically extended to his mouth. (That’s after the not-good doctor realized $1 million wasn’t a sufficient ask).

It’s also nearly equivalent to the value of Alberta’s entire economy in a year.

Sovereignist leaders would say: separate, and “all this becomes possible.” Smith was musing Thursday about how all sorts of good becomes possible if Albertans agree to start their own nest egg with a $334-billion principal.

Dramatically slashed premiums! Larger paycheques! Higher benefits for seniors! Maybe a $10,000 bonus for retirees!

But the reality checks on the Lifeworks report’s central assumption rolled in almost instantly after the astronomical estimate rolled off the premier’s tongue.

It’s an “impossible figure,” says Michel Leduc, senior managing director of the non-partisan Canadian Pension Plan Investment Board, which stewards the assets for Canadians. While he maintains any province has the legal right to withdraw and start its own pension plan, he urged skepticism of the numeric claims.

If other provinces used the “alternate formula” and demanded their shares be paid out too, he explained, there would be a negative balance by the time Ontario, British Columbia and Alberta left. (Sorry, other provinces.)

An executive with the agency in charge of investing Canadians’ federal pension funds, is pushing back on the Alberta pension report’s claim the province would get half the pension plan’s total assets if it left. (Mark Blinch/Reuters)

While Smith attributed Alberta’s share to the hard work of Albertans, the Lifeworks report itself attributes about 80 per cent of the province’s claimed share to investment income — the amount CPPIB has made by investing contributions, most of that since the 1990s reforms that boosted CPP premiums but also made the pension board a global investment heavyweight.

If Alberta had its pension funds outside that larger pan-Canadian pool, it’s far from a given that it would have performed nearly as well all these decades.

One could hear a scoff in the voice of University of Calgary economist Trevor Tombe as he spoke of the outsized hunk — half! — of the pension pie Alberta believes it deserves. “I think it was a little problematic that the government’s hanging its hat on half the CPP assets, which you think is kind of transparently unreasonable and not going to fly anywhere else in the country,” he said.

In Tombe’s own newly published paper, he estimates Alberta would be more reasonably entitled to 20 or 25 per cent of CPP’s present assets. CPPIB has not worked out its own figure, but Leduc said Tombe’s math is much closer to a realistic figure, though even that may be high.

The ultimate number that Alberta would scoop up if it actually pursues the Alberta Pension Plan dream isn’t Alberta’s to determine, or Lifeworks’ or Tombe’s or even CPPIB’s.

The federal government ultimately determines the asset transfer to a withdrawing province, likely in consultation with the other provinces.

The spectre of higher pension contributions in an Alberta-less CPP may soon attract ire in the rest of Canada. Alberta leaders have a long tradition of spats with Ottawa, but this pie-slice-haggling could draw in Smith’s fellow premiers.

Canada’s other premiers might push back on their Albertan colleague’s ambition to abandon the Canada Pension Plan, as it would likely force other Canadians to pay higher contributions. (The Canadian Press)

But the $334-billion claim will resonate with a slew of people in this province. They have spent generations absorbing conservative rhetoric about how we hard-working, high-earning Albertans send billions of dollars to federal coffers in taxes and premiums, and get far fewer billions returned to us. When the Kenney government held a referendum that purported to demand an end to the equalization program, 62 per cent of voters said yes, a fact Smith often mentioned as she kicked up her rhetorical campaign Thursday.

But in a nod to public discomfort on the pension question, Smith doesn’t even want to commit to a referendum yet, which she’s long promised as a necessary prelude to an APP — and wouldn’t happen until at least 2025, Finance Minister Nate Horner explained to CBC News.

The premier instead appointed an engagement panel to see where public mood is on this. It will be helmed by Jim Dinning, the former provincial treasurer who helped negotiate the modern CPP in the 1990s, and who ran for the Tory leadership decidedly opposed to a candidate who promised an APP — but now says he views the idea as an “intriguing opportunity” that could bring massive investment potential into this province.

Alberta pension plan: The politics and the practicality of going it alone

Provincial government is asking Albertans if they want to leave Canada’s pension plan. Premier Danielle Smith released a report on the feasibility of an Alberta pension plan today, but those who oppose the plan say this is more about politics than pensions.

An Alberta nest-minder

That opened one massive unknown among the many unknowns on what Alberta’s pension plan would look like. Theoretically, the fund could remain managed by CPPIB, but that would have to be approved in legislation by the Ottawa and other provinces that Alberta wishes to spurn here.

Smith could alternately task the Alberta Investment Management Co. (AIMCo) to manage Albertans’ pensions, but that body has not brought in nearly as sterling returns as the federal wealth manager, and is more susceptible to political intervention than the way CPPIB is set up.

To the many Albertans who are unsettled or spooked by the idea of abandoning the stability and reliability of the Canada Pension Plan, Smith is reassuring them they’ll be guaranteed the same benefits or better, and the same contribution rates or better.

She emphasizes the better, and purports there are 344 billion reasons to believe her on that.

There aren’t nearly as many reasons to question that number. But there are several, and when you add in all the uncertainties and risks that surround this monumental go-it-alone leap Alberta’s premier is proposing — well, that figure is probably pretty large as well.

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Looking for the next mystery bestseller? This crime bookstore can solve the case

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WINNIPEG – Some 250 coloured tacks pepper a large-scale world map among bookshelves at Whodunit Mystery Bookstore.

Estonia, Finland, Japan and even Fenwick, Ont., have pins representing places outside Winnipeg where someone has ordered a page-turner from the independent bookstore that specializes in mystery and crime fiction novels.

For 30 years, the store has been offering fans of Agatha Christie’s Hercule Poirot or Arthur Conan Doyle’s Sherlock Holmes a place to get lost in whodunits both old and new.

Jack and Wendy Bumsted bought the shop in the Crescentwood neighbourhood in 2007 from another pair of mystery lovers.

The married couple had been longtime customers of the store. Wendy Bumsted grew up reading Perry Mason novels while her husband was a historian with vast knowledge of the crime fiction genre.

At the time, Jack Bumsted was retiring from teaching at the University of Manitoba when he was looking for his next venture.

“The bookstore came up and we bought it, I think, within a week,” Wendy Bumsted said in an interview.

“It never didn’t seem like a good idea.”

In the years since the Bumsteds took ownership, the family has witnessed the decline in mail-order books, the introduction of online retailers, a relocation to a new space next to the original, a pandemic and the death of beloved co-owner Jack Bumsted in 2020.

But with all the changes that come with owning a small business, customers continue to trust their next mystery fix will come from one of the shelves at Whodunit.

Many still request to be called about books from specific authors, or want to be notified if a new book follows their favourite format. Some arrive at the shop like clockwork each week hoping to get suggestions from Wendy Bumsted or her son on the next big hit.

“She has really excellent instincts on what we should be getting and what we should be promoting,” Micheal Bumsted said of his mother.

Wendy Bumsted suggested the store stock “Thursday Murder Club,” the debut novel from British television host Richard Osman, before it became a bestseller. They ordered more copies than other bookstores in Canada knowing it had the potential to be a hit, said Michael Bumsted.

The store houses more than 18,000 new and used novels. That’s not including the boxes of books that sit in Wendy Bumsted’s tiny office, or the packages that take up space on some of the only available seating there, waiting to be added to the inventory.

Just as the genre has evolved, so has the Bumsteds’ willingness to welcome other subjects on their shelves — despite some pushback from loyal customers and initially the Bumsted patriarch.

For years, Jack Bumsted refused to sell anything outside the crime fiction genre, including his own published books. Instead, he would send potential buyers to another store, but would offer to sign the books if they came back with them.

Wendy Bumsted said that eventually changed in his later years.

Now, about 15 per cent of the store’s stock is of other genres, such as romance or children’s books.

The COVID-19 pandemic forced them to look at expanding their selection, as some customers turned to buying books through the store’s website, which is set up to allow purchasers to get anything from the publishers the Bumsteds have contracts with.

In 2019, the store sold fewer than 100 books online. That number jumped to more than 3,000 in 2020, as retailers had to deal with pandemic lockdowns.

After years of running a successful mail-order business, the store was able to quickly adapt when it had to temporarily shut its doors, said Michael Bumsted.

“We were not a store…that had to figure out how to get books to people when they weren’t here.”

He added being a community bookstore with a niche has helped the family stay in business when other retailers have struggled. Part of that has included building lasting relationships.

“Some people have put it in their wills that their books will come to us,” said Wendy Bumsted.

Some of those collections have included tips on traveling through Asia in the early 2000s or the history of Australian cricket.

Micheal Bumsted said they’ve had to learn to be patient with selling some of these more obscure titles, but eventually the time comes for them to find a new home.

“One of the great things about physical books is that they can be there for you when you are ready for them.”

This report by The Canadian Press was first published on Sept. 15, 2024.



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Labour Minister praises Air Canada, pilots union for avoiding disruptive strike

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MONTREAL – Canada’s labour minister is praising both Air Canada and the union representing about 5,200 of its pilots for averting a work stoppage that would have disrupted travel for hundreds of thousands of passengers.

Steven MacKinnon’s comments came in a statement shared to social media shortly after Canada’s largest air carrier announced it had reached a tentative labour deal with the Air Line Pilots Association.

MacKinnon thanked both sides and federal mediators, saying the airline and its pilots approached negotiations with “seriousness and a resolve to get a deal.”

The tentative agreement averts a strike or lockout that could have begun as early as Wednesday for Air Canada and Air Canada Rouge, with flight cancellations expected before then.

The airline now says flights will continue as normal while union members vote on the tentative four-year contract.

Air Canada had called on the federal government to intervene in the dispute, but Prime Minister Justin Trudeau said Friday that would only happen if it became clear no negotiated agreement was possible.

This report from The Canadian Press was first published Sept. 15, 2024.

Companies in this story: (TSX:AC)

The Canadian Press. All rights reserved.



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As plant-based milk becomes more popular, brands look for new ways to compete

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When it comes to plant-based alternatives, Canadians have never had so many options — and nowhere is that choice more abundantly clear than in the milk section of the dairy aisle.

To meet growing demand, companies are investing in new products and technology to keep up with consumer tastes and differentiate themselves from all the other players on the shelf.

“The product mix has just expanded so fast,” said Liza Amlani, co-founder of the Retail Strategy Group.

She said younger generations in particular are driving growth in the plant-based market as they are consuming less dairy and meat.

Commercial sales of dairy milk have been weakening for years, according to research firm Mintel, likely in part because of the rise of plant-based alternatives — even though many Canadians still drink dairy.

The No. 1 reason people opt for plant-based milk is because they see it as healthier than dairy, said Joel Gregoire, Mintel’s associate director for food and drink.

“Plant-based milk, the one thing about it — it’s not new. It’s been around for quite some time. It’s pretty established,” said Gregoire.

Because of that, it serves as an “entry point” for many consumers interested in plant-based alternatives to animal products, he said.

Plant-based milk consumption is expected to continue growing in the coming years, according to Mintel research, with more options available than ever and more consumers opting for a diet that includes both dairy and non-dairy milk.

A 2023 report by Ernst & Young for Protein Industries Canada projected that the plant-based dairy market will reach US$51.3 billion in 2035, at a compound annual growth rate of 9.5 per cent.

Because of this growth opportunity, even well-established dairy or plant-based companies are stepping up their game.

It’s been more than three decades since Saint-Hyacinthe, Que.-based Natura first launched a line of soy beverages. Over the years, the company has rolled out new products to meet rising demand, and earlier this year launched a line of oat beverages that it says are the only ones with a stamp of approval from Celiac Canada.

Competition is tough, said owner and founder Nick Feldman — especially from large American brands, which have the money to ensure their products hit shelves across the country.

Natura has kept growing, though, with a focus on using organic ingredients and localized production from raw materials.

“We’re maybe not appealing to the mass market, but we’re appealing to the natural consumer, to the organic consumer,” Feldman said.

Amlani said brands are increasingly advertising the simplicity of their ingredient lists. She’s also noticing more companies offering different kinds of products, such as coffee creamers.

Companies are also looking to stand out through eye-catching packaging and marketing, added Amlani, and by competing on price.

Besides all the companies competing for shelf space, there are many different kinds of plant-based milk consumers can choose from, such as almond, soy, oat, rice, hazelnut, macadamia, pea, coconut and hemp.

However, one alternative in particular has enjoyed a recent, rapid ascendance in popularity.

“I would say oat is the big up-and-coming product,” said Feldman.

Mintel’s report found the share of Canadians who say they buy oat milk has quadrupled between 2019 and 2023 (though almond is still the most popular).

“There seems to be a very nice marriage of coffee and oat milk,” said Feldman. “The flavour combination is excellent, better than any other non-dairy alternative.”

The beverage’s surge in popularity in cafés is a big part of why it’s ascending so quickly, said Gregoire — its texture and ability to froth makes it a good alternative for lattes and cappuccinos.

It’s also a good example of companies making a strong “use case” for yet another new entrant in a competitive market, he said.

Amid the long-standing brands and new entrants, there’s another — perhaps unexpected — group of players that has been increasingly investing in plant-based milk alternatives: dairy companies.

For example, Danone has owned the Silk and So Delicious brands since an acquisition in 2014, and long-standing U.S. dairy company HP Hood LLC launched Planet Oat in 2018.

Lactalis Canada also recently converted its facility in Sudbury, Ont., to manufacture its new plant-based Enjoy! brand, with beverages made from oats, almonds and hazelnuts.

“As an organization, we obviously follow consumer trends, and have seen the amount of interest in plant-based products, particularly fluid beverages,” said Mark Taylor, president and CEO of Lactalis Canada, whose parent company Lactalis is the largest dairy products company in the world.

The facility was a milk processing plant for six decades, until Lactalis Canada began renovating it in 2022. It now manufactures not only the new brand, but also the company’s existing Sensational Soy brand, and is the company’s first dedicated plant-based facility.

“We’re predominantly a dairy company, and we’ll always predominantly be a dairy company, but we see these products as complementary,” said Taylor.

It makes sense that major dairy companies want to get in on plant-based milk, said Gregoire. The dairy business is large — a “cash cow,” if you will — but not really growing, while plant-based products are seeing a boom.

“If I’m looking for avenues of growth, I don’t want to be left behind,” he said.

Gregoire said there’s a potential for consumers to get confused with so many options, which is why it’s so important for brands to find a way to differentiate themselves, whether it’s with taste, health, or how well the drink froths for a latte.

Competition in a more crowded market is challenging, but Taylor believes it results in better products for consumers.

“It keeps you sharp, and it forces you to be really good at what you’re doing. It drives innovation,” he said.

This report by The Canadian Press was first published Sept. 15, 2024.



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