By Don Newman

November 8, 2023

Alberta could be a leader in the country, putting people and new ideas at the forefront of the national debate. Instead, the people and their provincial government seem intent on rocking the Canadian boat and at times trying to upset it.

On one level, you can’t be too hard on the premiers. Attacking Ottawa is invariably the way to political success. That’s particularly true of the eight out of 10 premiers since 1971 who’ve been conservative. Rachel Notley and her NDP government were an anomaly when it won election in 2015. She worked cooperatively with the Liberal federal government of Justin Trudeau. Notley was a one-term premier, losing office in 2019.

Her replacement was former federal Conservative cabinet minister Jason Kenney. Even after being a long-time Ottawa fixture, Kenney picked up the anti-Ottawa rhetoric immediately. But in the end, it wasn’t enough. He resigned after a party revolt to be replaced by the current premier, Danielle Smith. Smith has taken the anti-Ottawa attack to a new level — even beyond that of Premier Ralph Klein in the 1990s, and the first successful anti-Ottawa Alberta Premier in the 1970s and 80s, Peter Lougheed.

Lougheed fought Justin Trudeau’s father, Pierre, as prime minister when Trudeau brought in the National Energy Program (NEP). The fight was over the domestic price of Alberta oil and the shares of that price that Ottawa and the province would take. After the NEP, in the 1980 federal budget, brought in a pricing regime favouring the federal government, Lougheed began cutting oil shipments to eastern refineries by 200,000 barrels every three months. The deadline for the third reduction was reached at the same time negotiations between Ottawa and Edmonton came to a price-sharing agreement.

That fight over oil prices now seems relatively tame compared to what Smith is proposing. The premier has a double-pronged attack that is diverting attention from more important questions. First, she campaigned for the United Conservative Party (UCP) leadership on the promise of legislation that would empower the legislature to pass a bill allowing Alberta and Albertans to ignore any federal laws deemed to be intrusive into provincial jurisdiction or harmful to Alberta’s economy.

No sooner was Smith elected with a majority government than she proposed and passed the “Alberta Sovereignty Act Within Canada Act” to give the Alberta Government the powers she is promoting, but which has not been tested in Court and may yet be deemed unconstitutional.

Now, the premier wants Alberta to pull out of the Canada Pension Plan (CPP) and set up a rival provincial plan instead.

The CPP was established in 1965. Quebec did not join, claiming pensions were provincial jurisdiction, and instead created its own pension plan which has had great success. All the other provinces signed up, although the federal legislation creating the CPP allowed provinces to opt out at a later date if they gave appropriate notice and negotiated the terms of leaving. Until now, no province has contemplated leaving. The CPP is regarded as a success. But with the Liberals in power in Ottawa, with the name Trudeau always a red flag in the province and provincial paranoia running high, Smith has latched onto the issue as red meat for the Conservative base.

No one wants Alberta to leave and possibly destabilize the CPP. And certainly no one is prepared to contemplate it leaving with over half the plan’s assets.

Her government commissioned a study on Alberta going it alone with its own pension plan. Like a friendly “expert” witness in a court case, the study by a consultancy called Lifeworks concluded what the government wanted to hear; that a stand-alone Alberta Pension plan would be able to offer lower premiums and higher pensions than staying in the CPP would provide.

But that was not all. The Lifeworks study said that if Alberta left the CPP, the province would be entitled to take 53 per cent or about $334 Billion of the plan’s assets. This would be the case even though Alberta has only 16 per cent of Canada’s population. Lifeworks argued that Alberta would be entitled to all the extra money because its population is younger than the Canadian average, makes more money than average in the province’s resource rich economy and so has contributed much more to the CPP than its population would suggest.

The Alberta move has triggered a large and disapproving reaction from both the federal government and every other provincial government. That is why federal Finance Minister Chrystia Freeland, who said Smith’s plan would be a ‘historic, costly, irreversible mistake’, organized a virtual meeting among all the finance ministers at the end of last week. No one wants Alberta to leave and possibly destabilize the CPP. And certainly no one is prepared to contemplate it leaving with over half the plan’s assets.

To provide more accurate numbers, Freeland has referred those questions to the Office of the Chief Actuary, an official in the Office of the Superintendent of Financial Institutions, the federal official responsible for the integrity of the Canadian financial system. At some point, the chief actuary will produce a report with new numbers. In the meantime, the Smith government is conducting a campaign in Alberta to convince people in the province that a stand-alone plan is a good idea. So far, the plan hasn’t had widespread support.

Opponents in Alberta will also argue that today’s conditions might be favourable but that won’t necessarily always be the case. The Alberta population will age — as populations do — and the resource-rich energy economy may not always be throwing off the money it does now. Climate change is already dictating a reduction in the use of fossil fuels, and today’s prices will someday fall again, as they did precipitously between 2014 and 2016.

But in the short term, the Alberta government will pursue the course it is currently on. The friction with the rest of Canada will continue. Danielle Smith won’t mind that. It will probably boost her popularity in Alberta.

Contributing Writer and columnist Don Newman, an Officer of the Order of Canada and lifetime member of the Parliamentary Press Gallery, is Executive Vice President of Rubicon Strategy, based in Ottawa.