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.
Alberta
Alberta government should eliminate corporate welfare to generate benefits for Albertans
From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
Authors:
Alberta
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