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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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Nova Scotia election debate: Leaders clash over pace of health-care improvement

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HALIFAX – Nova Scotia’s NDP and Liberal leaders attacked Progressive Conservative leader Tim Houston’s claims of reviving the province’s ailing health-care system, citing patient horror stories during a televised debate Thursday.

As Houston stuck to his argument that his government inherited “a mess” that it has started to stabilize, Liberal Leader Zach Churchill responded by saying that the number of people on a wait list seeking family doctors has gone from 60,000 when the Liberals governed to recent figures of about 145,000.

“If we continue on this track, there are going to be half a million people in this province without a doctor, and that’s going to be devastating for the health system and for people’s health,” said Churchill.

Houston countered by saying the system had crumbled under 12 years of NDP and Liberal governments, arguing. “We were taking over from parties that were inactive in health care.”

The Progressive Conservative leader — who is running for a second term in the Nov. 26 election — conceded improvement to the system “is taking time,” while saying that since 2021 there has been a net gain of 250 doctors, with more coming through programs to train physicians and speed up certification for foreign-trained doctors.

He said that there are one million more “appointment opportunities” for patients than when his government took office, as his government has opened more clinics and allowed health-care professionals such as pharmacists to take on wider scopes of practice.

However, NDP Leader Claudia Chender responded by telling the story of a young mother who waited for 14 hours with her feverish child in an emergency room, saying this is “completely unacceptable and it’s because of a lack of primary care.” The NDP is promising to create 15 collaborative care clinics in its first year of government.

During an exchange with Houston, Churchill claimed that despite hundreds of millions in added spending on health, “there are more mice than staff” at Halifax’s Victoria General hospital.

Chender also sharply criticized Houston after he noted a health-care app pioneered by the Tories had “opened up access” to care for people facing a mental health crisis in the middle of the night. The NDP leader said, “what we need is actual resources to help people when they need it.”

The debate hosted by CBC grew lively over Houston’s argument that his government would be the most effective in reducing inflation because he has opposed implementing carbon pricing on fuel.

“I am the only one that will stand up to the carbon tax. I know the Liberals want a carbon tax under a different name. It’s still a carbon tax, it impacts the price of everything. The best thing we can do with affordability … is stand up to the carbon tax,” he said.

Chender said she found it ironic that Houston was saying he was the voice of action, “when all you do is blame Ottawa for the challenges that people are facing today in Nova Scotia.”

Churchill, meanwhile, noted the “carbon tax is still here …. We will end the carbon tax by bringing in a cap-and-trade system that will do our part to reduce emissions, give money back to you so you can pay for your heat pumps, get rebates for your electric vehicles and it will also take 10 to 15 cents off at the pump.”

“Mr. Houston would rather kick and scream and whine than actually do his job and negotiate a better deal for you,” said the Liberal leader.

That led to the assertion by Houston — one he has made frequently during the campaign — that he alone is untethered to a federal party.

“I’m the only leader on this stage that is only looking out for the interests of Nova Scotians and not beholden to a political party. The NDP are beholden to Jagmeet Singh in Ottawa, the Liberals are beholden to Justin Trudeau in Ottawa. I am only beholden to Nova Scotians,” he said.

At the dissolution of the 55-seat legislature, the Progressive Conservatives held 34 seats, the Liberals had 14 seats, the NDP held six and there was one independent member. Recent polls show the Tories with a sizable lead over the other two parties.

The debate also included some sharp exchanges over Houston’s credibility after he jettisoned several promises made in the last election.

The Progressive Conservative leader said, “Everything that I tell you, I believe in my heart we can do …. I believe I’ve shown Nova Scotians that when new information comes available or when I can see that I’m wrong, I have the courage to change path.”

But Churchill responded that Houston’s failure to keep a promise to hold the election on a fixed date — which would have been next summer — was a signal he’s more interested in gaining power than being accountable.

“This election is not about you, it’s about him,” he told viewers.

The Liberal leader said he would not seek re-election if he were unable to keep his promises. “Even through the hard times when the public pressure shifts and the headlines get bad, you can’t govern like a wet noodle in the wind,” he said.

This report by The Canadian Press was first published Nov. 14, 2024.

— With files from Keith Doucette.



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Trudeau to attend APEC in Peru, G20 summit in Brazil as peer nations brace for Trump

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OTTAWA – Prime Minister Justin Trudeau has arrived in Lima, Peru, where he will attend the APEC summit before heading to Rio de Janeiro, Brazil, for the G20.

Both summits aim to improve the multilateral institutions that have drawn skepticism from U.S. president-elect Donald Trump.

In Peru, Trudeau will take part in meetings of the Asia-Pacific Economic Cooperation group, which largely involves resolving barriers to trade and forming better links across the Pacific Rim.

On Sunday, the prime minister will leave for Brazil for the G20 summit, for discussions ranging from the war in Ukraine to artificial intelligence and ending hunger.

Both summits will involve meeting with other heads of government in formal meetings as well as side conversations.

Analysts say it will be key for Canada to try to retain strong ties with numerous countries, as the looming Trump administration plans to raise tariffs and could disrupt global trade flows.

Trudeau is travelling with his daughter, Ella-Grace, 15.

This report by The Canadian Press was first published Nov. 14, 2024.

Note to readers: This is a corrected story. A previous version said Trudeau will be flying to Brazil on Saturday.

The Canadian Press. All rights reserved.



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Trudeau in Peru for APEC meeting as leaders seek to reinforce multilateralism

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OTTAWA – Prime Minister Justin Trudeau is in Peru, kicking off five days of meetings with leaders from around the globe as the world braces for the looming return of U.S. president-elect Donald Trump.

The meetings come as emerging powers like China vie for influence in South America, and as Canada clings to global trade blocs and multilateral systems under pressure from populist leaders.

In Lima, Trudeau is attending an Asia-Pacific Economic Cooperation summit, or APEC. The group focuses on resolving trade barriers and forming better links across the Pacific Rim. He’ll then head to Brazil for the G20 leaders’ summit of the world’s biggest economies.

Vina Nadjibulla, research vice-president for the Asia Pacific Foundation, said there’s lot to criticize about both summits, from who gets to attend to how productive they tend to be. But she stressed they are crucial for Canada navigating its place in a shifting world.

“Our prosperity depends on this,” she said.

“As things are shifting, there’s a lot of anxiety and we need to be at the table in reshaping the international trade order and reshaping the international economic order.”

Trudeau is set to take part in meetings Friday with guest countries invited by the Peruvian hosts, and the prime minister will give a lunchtime speech to delegates. The afternoon will involve meetings with various national and business leaders, including at an event focused inclusive growth and environmental sustainability.

APEC played a role in the creation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, a trade deal representing a massive area of countries along the Pacific Rim, from New Zealand to Chile. Canada ratified the agreement in 2018.

The U.S. was part of forming the trade pact, but Trump withdrew Washington from it on his first day in office in 2017. His successor, current U.S. President Joe Biden, never rejoined the pact, in a sign of cross-partisan weariness among Americans toward globalization.

Nadjibulla said the looming Trump presidency likely means a reduced role for the U.S. in multilateral institutions and fighting climate change, as well as greater tension with China over trade, tariffs and technology.

Canada is currently chairing the CPTPP trade bloc, and next year will be hosting the G7 summit of advanced economies, culminating in a leader’s summit in Alberta. This means Trudeau will be pushing to preserve rules-based trade “that is critical to our prosperity” over the coming days, Nadjibulla said.

“APEC is meeting in the context of rising protectionism, intense geopolitical competition, uncertain economic growth and the Trump election,” she said.

“It’s really quite different from the founding vision of APEC, which is all about trade liberalization (and) deeper economic integration. APEC was essentially a product of an era of hyperglobalization, which is definitely coming to an end.”

APEC meetings also give leaders a chance to meet when they are unlikely to visit each other’s countries, such as in San Francisco last year when Chinese President Xi Jinping and Biden smoothed out diplomatic tensions caused by surveillance balloons and restrictions on microchip usage.

Canadian officials have been mum on the prospect of Trudeau meeting with Xi, either in a formal sit-down or an informal hallway chat.

Foreign Affairs Minister Mélanie Joly went to Beijing in July, which could set the stage for Trudeau to do so on this trip, but Nadjibulla said the Chinese leader is likely more focused on other leaders at both summits.

“The tone and the rhetoric, I think, will escalate in the coming months, partly because of the actions that the U.S. is likely to take, and Canada will have to stay aligned with that,” Nadjibulla said.

Media in India are also speculating as to whether Indian Prime Minister Narendra Modi will meet with Trudeau, though Nadjibulla said that’s unlikely given Modi’s government blaming the Trudeau government and not Canada as a whole for heightened tensions.

Nadjibulla stressed that Canada is a respected nation in the region, including in Peru.

“We’re not a small player, because of our historic engagement particularly in the mining sector. And we can play an important role in shoring up the Western presence at the meetings.”

More than a dozen Canadian business leaders are attending the summit, as industry looks to expand commerce in the region involving critical minerals and clean technology.

On Sunday, the prime minister will leave for Brazil for the G20 summit, for discussions ranging from the war in Ukraine to artificial intelligence and ending hunger.

The Group of 20 includes leaders ranging from long-standing allies such as French President Emmanuel Macron, to populist firebrands like Argentine President Javier Milei, who just withdrew his negotiators from the annual UN climate talks underway in Azerbaijan.

John Kirton, head of the G20 Research Group, expects Trudeau and many leaders to have informal talks on the sidelines to make sense of how to navigate another Trump presidency.

“Trudeau will be in a relatively privileged position, because he’s been with Donald Trump at (several) summits, and we’re the next-door neighbours; we’re a front-line state,” he said.

His team, based out of the University of Toronto, will be closely watching for what the ending communiqué has to say about global trade, with Trump promising protectionist policies.

Trump has vowed to implement high tariffs that have been panned by economists. The London School of Economics warned last month these policies would likely hurt the economies of the U.S., China and the European Union.

Nadjibulla said it’s crucial that governments like Canada avoid fatalism, and remember that Trump’s promised policies might look different when they’re actually implemented.

“There is room and opportunity for economies and countries to co-ordinate and try to shape common responses to what they perceive to be a threat,” she said.

“These multilateral gatherings are still the best that we have. And we have to do everything we can to make them more relevant and better fit to address today’s challenges.”

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



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