Alberta
No Matter Which Formula, Albertans Win With An Alberta Pension Plan
From the Alberta Institute
Guest Post By Lindsay Wilson
Opponents of the Alberta Pension Plan (APP) have wasted no time busting out the pitchforks, with their legacy media lapdogs hard at work toeing the line for the union big wigs and their NDP friends.
It’s merely weeks into the launch of a province-wide public consultation to educate and get feedback from Albertans on an APP and there is no shortage of Trudeau-funded media penning pieces laden with misinformation.
They’re pushing a fear-based narrative that has seniors running scared and reasonable people questioning whether the bold move isn’t a little selfish which is no different than what Quebec has been doing — quite successfully — since day one.
For us here at Alberta Proud, we not only think opting out of the Canada Pension Plan (CPP) and establishing an APP is a great idea — it’s a critical step toward more Alberta autonomy.
If we don’t, will we ever achieve much of anything in the arena of autonomy? Think about it: if we can’t win a referendum on the one thing we don’t need permission from Ottawa to do, where does that leave us?
More Alberta and Less Ottawa isn’t just a pie in the sky for us at Alberta Proud. It’s our mantra.
We genuinely believe enough is enough. It’s time for Ottawa to take a hike, including their antiquated equalization formula that you voted 62% in favour of scrapping.
We now have an opportunity to leave the CPP, in favour of a made-in-Alberta plan which must offer the same or better benefits. And it will, without question, put more money into your pocket every year as we finally won’t be overcontributing.
The newest twist in the anti-APP narrative is casting doubt on the formula the independent, government-commissioned LifeWorks report produced: that 53% of the CPP assets ($334 billion) would be owed to Alberta.
By switching to an APP, that translates to putting an additional $1,425 back into each employee’s pocket, according to LifeWorks, and when you consider the employer’s contribution, that amount is effectively doubled.
That’s a huge incentive for Alberta employers, those coming here to work and for the majority of hard-working everyday people who are drowning in this era of inflation (or #justinflation as we like to call it at Alberta Proud).
Meanwhile in the mainstream media, economist Trevor Tombe is balking at the math, claiming Albertans will be owed around one-third of what LifeWorks has assessed.
While it may seem odd everyone is arriving at different numbers, here is the kicker: even if we leave with only 17% (among the lower estimates floating around and not the 25% estimated by Tombe or the 53% estimated by LifeWorks) it’s still a better deal for Albertans.
But how, you ask? Simply put, we would finally get a break from this hidden transfer program, which is yet another way in which hardworking Albertans subsidize the rest of the country.
We have a comparatively younger population and because of this, we have paid more than we have collected. It has always been this way for us, and it doesn’t look like that will change. In the past year, a record 185,000 new Albertans moved here to work and take advantage of our low taxes and abundant opportunities. Any way you slice it, our contribution rate would fall.
Another concern is around who will manage an APP.
While the opposition is quick to point out CPP investment returns have been decent and that an APP would be best not left in the hands of AIMCo, did you know we could very well use the same pension fund manager as the CPP or another arms-length, third party?
By putting Alberta first, you will not risk your pension.
By switching to an APP, you will put more money in your pocket.
Ottawa has long turned its back on Albertans and continues to hit us with eco-radical regulations that will leave us broke and freezing in the dark. If we stay in the CPP, we are sending them a message that they can keep pushing us around, forever, no matter what they do to us.
It’s time for a change.
So, take a moment to fill out the Alberta government survey.
Send emails to your MLA, Finance Minister Nate Horner and Premier Danielle Smith. Show up to the townhalls.
Alberta’s future of more autonomy depends on all of us getting loud and Alberta Proud!
Lindsay Wilson is the President of Alberta Proud, a group of citizens concerned about Alberta’s future within Canada.
From the Fraser Institute
By Tegan Hill
According to the recent mid-year update tabled Thursday, the Smith government projects a $4.6 billion surplus in 2024/25, up from the $2.9 billion surplus projected just a few months ago. Despite the good news, Premier Smith must reduce spending to avoid budget deficits.
The fiscal update projects resource revenue of $20.3 billion in 2024/25. Today’s relatively high—but very volatile—resource revenue (including oil and gas royalties) is helping finance today’s spending and maintain a balanced budget. But it will not last forever.
For perspective, in just the last decade the Alberta government’s annual resource revenue has been as low as $2.8 billion (2015/16) and as high as $25.2 billion (2022/23).
And while the resource revenue rollercoaster is currently in Alberta’s favor, Finance Minister Nate Horner acknowledges that “risks are on the rise” as oil prices have dropped considerably and forecasters are projecting downward pressure on prices—all of which impacts resource revenue.
In fact, the government’s own estimates show a $1 change in oil prices results in an estimated $630 million revenue swing. So while the Smith government plans to maintain a surplus in 2024/25, a small change in oil prices could quickly plunge Alberta back into deficit. Premier Smith has warned that her government may fall into a budget deficit this fiscal year.
This should come as no surprise. Alberta’s been on the resource revenue rollercoaster for decades. Successive governments have increased spending during the good times of high resource revenue, but failed to rein in spending when resource revenues fell.
Previous research has shown that, in Alberta, a $1 increase in resource revenue is associated with an estimated 56-cent increase in program spending the following fiscal year (on a per-person, inflation-adjusted basis). However, a decline in resource revenue is not similarly associated with a reduction in program spending. This pattern has led to historically high levels of government spending—and budget deficits—even in more recent years.
Consider this: If this fiscal year the Smith government received an average level of resource revenue (based on levels over the last 10 years), it would receive approximately $13,000 per Albertan. Yet the government plans to spend nearly $15,000 per Albertan this fiscal year (after adjusting for inflation). That’s a huge gap of roughly $2,000—and it means the government is continuing to take big risks with the provincial budget.
Of course, if the government falls back into deficit there are implications for everyday Albertans.
When the government runs a deficit, it accumulates debt, which Albertans must pay to service. In 2024/25, the government’s debt interest payments will cost each Albertan nearly $650. That’s largely because, despite running surpluses over the last few years, Albertans are still paying for debt accumulated during the most recent string of deficits from 2008/09 to 2020/21 (excluding 2014/15), which only ended when the government enjoyed an unexpected windfall in resource revenue in 2021/22.
According to Thursday’s mid-year fiscal update, Alberta’s finances continue to be at risk. To avoid deficits, the Smith government should meaningfully reduce spending so that it’s aligned with more reliable, stable levels of revenue.
Author:
Better, faster, more affordable auto insurance
Alberta’s government is introducing a new auto insurance system that will provide better and faster services to Albertans while reducing auto insurance premiums.
After hearing from more than 16,000 Albertans through an online survey about their priorities for auto insurance policies, Alberta’s government is introducing a new privately delivered, care-focused auto insurance system.
Right now, insurance in the province is not affordable or care focused. Despite high premiums, Albertans injured in collisions do not get the timely medical care and income support they need in a system that is complex to navigate. When fully implemented, Alberta’s new auto insurance system will deliver better and faster care for those involved in collisions, and Albertans will see cost savings up to $400 per year.
“Albertans have been clear they need an auto insurance system that provides better, faster care and is more affordable. When it’s implemented, our new privately delivered, care-centred insurance system will put the focus on Albertans’ recovery, providing more effective support and will deliver lower rates.”
“High auto insurance rates put strain on Albertans. By shifting to a system that offers improved benefits and support, we are providing better and faster care to Albertans, with lower costs.”
Albertans who suffer injuries due to a collision currently wait months for a simple claim to be resolved and can wait years for claims related to more serious and life-changing injuries to addressed. Additionally, the medical and financial benefits they receive often expire before they’re fully recovered.
Under the new system, Albertans who suffer catastrophic injuries will receive treatment and care for the rest of their lives. Those who sustain serious injuries will receive treatment until they are fully recovered. These changes mirror and build upon the Saskatchewan insurance model, where at-fault drivers can be sued for pain and suffering damages if they are convicted of a criminal offence, such as impaired driving or dangerous driving, or conviction of certain offenses under the Traffic Safety Act.
Work on this new auto insurance system will require legislation in the spring of 2025. In order to reconfigure auto insurance policies for 3.4 million Albertans, auto insurance companies need time to create and implement the new system. Alberta’s government expects the new system to be fully implemented by January 2027.
In the interim, starting in January 2025, the good driver rate cap will be adjusted to a 7.5% increase due to high legal costs, increasing vehicle damage repair costs and natural disaster costs. This protects good drivers from significant rate increases while ensuring that auto insurance providers remain financially viable in Alberta.
Albertans have been clear that they still want premiums to be based on risk. Bad drivers will continue to pay higher premiums than good drivers.
By providing significantly enhanced medical, rehabilitation and income support benefits, this system supports Albertans injured in collisions while reducing the impact of litigation costs on the amount that Albertans pay for their insurance.
“Keeping more money in Albertans’ pockets is one of the best ways to address the rising cost of living. This shift to a care-first automobile insurance system will do just that by helping lower premiums for people across the province.”
Quick facts
- Alberta’s government commissioned two auto insurance reports, which showed that legal fees and litigation costs tied to the province’s current system significantly increase premiums.
- A 2023 report by MNP shows
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