Yahoo Finance 'Fraught with risks': Alberta pension plan not a high priority for small businesses
A group representing small businesses in Canada says an Alberta pension plan would be "fraught with risks" and is not a high priority for businesses in the province.
The Alberta government released a report on Thursday on the financial implications of pulling out of the Canada Pension Plan in favour of an Alberta pension plan. The report estimated that the province is entitled to a $334 billion of CPP's assets, or 53 per cent, a figure that has been disputed by the Canada Pension Plan Investment Board (CPPIB).
"I think it sounds a lot better than it would likely be in reality," Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), said in an interview with Yahoo Finance Canada. He said Alberta pulling out of the CPP would result in higher premiums for remaining CPP participants, while an Alberta pension plan would be "fraught with risks."
"The smaller the pension fund, the greater the risk profile that one would have to take on, and I think that needs to be considered," Kelly said. "And I suspect the share of assets Alberta would ultimately get would be way less than they are expecting."
"As a result, the question of whether Alberta businesses and individual workers would be better off is really not clear at all."
A CFIB survey conducted ahead of the Alberta election in May found that 27 per cent of small businesses viewed the creation of an Alberta pension plan as a high priority. That's down from 2020, when 36 per cent of small business owners listed it as a high priority. At the same time, the number of businesses that consider the creation of an Alberta pension plan as a low priority has grown over the last three years, jumping from 33 per cent in 2020 to 38 per cent in 2023. The number of businesses that consider it a medium priority has stayed relatively flat, rising from 21 per cent in 2020 to 22 per cent in 2023.
Alberta Premier Danielle Smith is in favour of a provincial-run pension plan, and has said that the province would come out ahead if it decides to leave the CPP.
"Alberta small business owners are fairly split on whether this is a good idea or not, but they don't see it as a big priority for the government," Kelly said.
"There are other things that they would like the Alberta government to focus on, including lowering the small business corporate tax rate and continuing some of the relief measures that they put in place for energy prices. Those are some of the bigger priorities we have rather than an Alberta Pension Plan."
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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