An Alberta Pension Plan will affect far more Canadians than Albertans
It's not just about the money they've already invested; it's about their future.
I read a lot. I keep up with government press releases and I keep up with people who pay attention to politics, talk about politics, and write about politics. I also pay much more attention to narratives from conservative politicians. That’s why I found myself with an odd question this week.
I would have expected former Premier Jason Kenney, or recently-elected Premier Danielle Smith, or any of their more devout supporters for that matter, to be bragging about how well the corporate tax was doing if their policy had worked as expected. Yet, I’ve heard little self-congratulatory sentiments, let alone the back-slapping public advertising campaign I would also have expected if that were the case.
This morning, I saw a screenshot from a presentation Red Deer South MLA Jason Stephan gave at an Alberta Pension Plan (APP) Town Hall and was reminded that part of the UCP’s selling point on an APP is that it will save businesses money.
Of course, this all hinges on Alberta gaining a wildly disproportionate amount of the current CPP fund, and the outcome of a potentially non-binding referendum only available to Albertans, and some unicorn dust, surely, but that’s beside the point for now.
Alberta’s corporate tax revenue doubled last year
Doubled.
And not one word was uttered by the UCP.
Revenue from corporate income tax (CIT) was $4.107 billion in 2019. For reference, CIT revenue was $5.3 billion in 2013 when oil and gas was still riding high before the 2014 downturn.
In 2022, it was $8.167 billion. It’s just shy of doubling, sure, but not enough that I won’t call it “double”.
That’s forecast to be somewhat lower in 2023, only $6.8 billion, but still much higher than when we were enjoying “boom times”. I’ll note that the province underestimated CIT revenue by a few billion the year prior, so I’m not certain what to expect when the year-end update arrives this June.
What changed so much between 2022 and 2023 that would account for that much of a reduction? It’s not my area of expertise to speculate upon.
With so much extra corporate revenue, however, one would expect that unemployment in the province would be at historic lows. Corporate tax revenue increases — especially with lower tax rates — means corporations are making money.
Yet, as of December 2023, the province’s unemployment rate is still higher than the national average and has consistently been higher than the national average since January 2022.
In provinces with lower unemployment, such as Saskatchewan and British Columbia, revenue from CIT showed marginal bumps of millions, but nowhere near close to the billions seen by Alberta. While somewhere around 45 per cent of that is due to oil and gas (not including resource royalties), it would still appear that Alberta-based businesses saw an increase not registered in other provinces.
So, either corporations are doing exceptionally well only in this province or we’ve become the Delaware of the north; that is to say “business-friendly” — not “job creation-friendly”.
What that means for an Alberta Pension Plan
If jobs aren’t increasing, and corporations in Alberta haven’t found the secret profit-making formula that no one else has, then Jason Kenney’s plan to offer Canadian businesses a tax cut for opening a corporate mailbox in the province probably worked.
But here’s the rub: that means far more Canadians risk being forced into an Alberta Pension Plan than are aware of that fact.
Payroll taxes follow the business, not the employee.
While we don’t have any details on what an APP would look like, in order for Alberta to take the money and run, I mean, formally exit the CPP, the government of Alberta would have to provide assurances that a similar plan would exist (not forever, just to get out — they can do whatever they want with it afterwards).
Effectively, if your employer changed their mailing address to Alberta, both their contributions on your behalf, and your personal contributions would be confiscated, I mean, invested into an Alberta Pension Plan.
Don’t get me wrong — I think it’s fantastic that Kenney’s scheme worked to keep revenue coming into the treasury without asking Albertans to pay for their services (it keeps the numpties from blaring their horns in the streets), but I wouldn’t trust the UCP within a mile of my pension and I don’t expect many Canadians outside of Alberta would either.
Alberta’s plan does not just affect people living in the province today — it affects those who no longer live here, and those who work for Alberta-based companies; yet they will not have a say in the UCP’s plan.
While we in Alberta are subject to the whims of the government our neighbours duly elected, other Canadians should not be.