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Danielle Smith’s Pension Trickery: Why Voters Might Just Fall for It

Albertans have a long history of swallowing fantasies sold by Conservative leaders.

Graham Thomson 27 Sep 2023The Tyee

Graham Thomson is an award-winning Edmonton-based columnist who has covered Alberta politics for more than 30 years.

There is absolutely no way Albertans will fall for it.

Unless they do.

And if they do, every Canadian will feel the impact.

Premier Danielle Smith’s push for an Alberta pension plan is based on so much wishful thinking, imaginary numbers and outright chutzpah you’d think it’s surely doomed to failure.

However, over the years a series of conservative governments in Alberta have used political trickery — under the disguise of democracy — to convince Albertans that they could, among other things, scrap the federal equalization program, elect senators and ignore climate change.

The template for political deception was set in 2002 when then-premier Ralph Klein discovered to his horror that 72 per cent of Albertans polled in May supported the Kyoto accord to tackle climate change.

Klein — who liked to mock the reality of climate change by saying global warming was caused by “dinosaur farts” — spent the summer running what he called a “very aggressive defensive action” (a.k.a. a misinformation campaign) to convince Albertans that complying with the accord would kill oilsands projects, derail energy investments and cost hundreds of thousands of jobs.

After months of fear-mongering, the government conducted a followup poll where Klein discovered to his delight and relief that 72 per cent of Albertans no longer supported the Kyoto accord and preferred Klein’s watered-down made-in-Canada plan.

He had cynically manipulated Albertans. And the die was cast.

In 2021, then-premier Jason Kenney resurrected Alberta’s goofy Senate “elections” — the illusion whereby Albertans cast ballots for candidates (usually Conservatives) to be elected to the upper house. That’s not how senators are chosen. They are appointed by the Independent Advisory Board for Senate Appointments. But this was part of Kenney’s “fight back” strategy where he convinced Albertans that he was leader of “a government committed to Senate democracy,” unlike Trudeau.

But Kenney’s epic manipulation of public sentiment came when he held a referendum (also in 2021) on the federal equalization program. Kenney claimed the program was, in so many words, robbing Albertans by taking more money from the province than they received in transfer payments.

Equalization is paid for by federal tax dollars collected from Canadians at the same taxation rates across the country, but Kenney created the fiction the referendum would at least force Ottawa to begin negotiations with Alberta.

The referendum question asked if the section of the Constitution dealing with equalization payments should “be removed from the Constitution.”

Alberta, of course, cannot unilaterally change the Constitution, but Kenney muddied the waters enough that confused Albertans thought they could. In the end, 62 per cent voted yes to scrap equalization with 38 per cent voting no. But the voter turnout was abysmally low, only 39 per cent. That meant of all the eligible voters in Alberta, just 24 per cent voted to scrap equalization.

Still, that was enough for Kenney to declare victory. And Smith is using that “victory” to help justify her push for an Alberta pension plan.

“We have an imbalance in Confederation [and that] is part of the reason there was a 62 per cent vote on the equalization referendum — and unfortunately that was ignored by the federal government,” said Smith last Thursday while unveiling her pension plans.

This time around, Smith’s United Conservative government has raised political trickery to a new level. It is using a deeply flawed government-commissioned report to convince Albertans that they are entitled to more than half of the Canada Pension Plan’s assets (currently at $575 billion) to set up their own Alberta plan.

Michel Leduc, a senior managing director of the Canada Pension Plan Investment Board, accuses the LifeWorks report of using an “invented formula” and “alternate interpretations” of the Canada Pension Plan Act to come up with a declaration that Alberta “should get” $334 billion from the fund. To underscore his argument that Alberta is not entitled to more than half of the CPP assets, Leduc points out that 80 per cent of the plan's assets are thanks to investment income, not contributions.

Despite a chorus of experts pointing out flaws in the report, the Smith government is already trotting out social media posts and an ad campaign pointing to the benefits of an Alberta pension plan with fiscal goodies such as a $10,000 lump sum for seniors and $1,425 in savings every year to workers.

A government web page devoted to the Alberta pension plan trumpets “Your pension, your choice,” but that “choice” is being manipulated by declarations like this all-caps statement: “$5 BILLION — MORE MONEY IN THE POCKETS OF ALBERTANS.” And that, proclaims the government, is “in the first year alone.” The web page envisions such a bright future for an Alberta plan that the government should issue sunglasses to readers.

It goes on to declare “Albertans pay too much into CPP for the benefits they receive.” This is a complete and deliberate misrepresentation of how the CPP works. Individual Albertans, like all Canadian workers, contribute to the plan at the same scale and receive benefits at the same scale when they retire. There is no “over contribution” from Albertans.

But Smith — a populist libertarian who has been championing an Alberta pension plan for 20 years — is using the well-worn argument that Albertans are victims of an unfair Confederation.

This strategy, viewing everything on a transactional basis with the rest of Canada, has worked remarkably well in the past with Albertans, especially when political leaders couch it in terms of grievance and democracy. And especially when politicians couch issues in terms of “what’s in it for you” (which is the actual headline of the government’s new pension plan web page).

The government’s three-person “engagement” panel will get to work within weeks using virtual sessions to gauge what Albertans think of withdrawing from the CPP and setting up an Alberta pension plan.

But the panel’s work is already skewed. An online survey asks Albertans not whether they want to withdraw from the CPP but what kinds of benefits they want under an Alberta pension plan.

The panel is headed by Jim Dinning, a former finance minister who in the past criticized the notion of an Alberta pension plan but now calls withdrawing from the CPP “an intriguing opportunity.”

“We encourage Albertans to read the report, go online to the website that you’ll find and start the conversation with facts, not with fear, but with facts in hand,” said Dinning, suggesting the report is where Albertans will find the “facts” and not simply assumptions based on whimsical thinking that has been undercut by well-respected experts like Calgary-based economist Trevor Tombe, who questions the need for an Alberta pension plan and figures the province might get $120 billion at best to start its own plan.

Dinning expects to present a report to Smith in May. They will decide if there’s enough public support to warrant holding a provincewide referendum to withdraw from the CPP. But ominously, neither has explained what constitutes enough support.

The crucial difference between Kenney’s referendum to scrap the equalization program and Smith’s push for an Alberta pension plan is that Smith can legally withdraw Alberta from the CPP.

She does not have the power to unilaterally grab $334 billion from the CPP, but by persuading Albertans to support the establishment of an Alberta plan, she can force the federal government and other provinces into negotiating a division of assets that could threaten the stability of the federal plan. (Quebec wouldn’t be part of any talks because its own pension plan was never part of the CPP.)

Your pension is on the line here, whether you live in Alberta or not.

You’d think there’s no way Albertans would support this. But that would be to underestimate the ability of Alberta’s political leaders to manipulate their citizens.  [Tyee]

Read more: Politics, Alberta

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