A group representing small businesses in Canada criticizes Alberta Pension Plan

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’s report on the financial implications of pulling out of the Canada Pension Plan (CPP) in favor of an Alberta pension plan has been disputed by the Canada Pension Plan Investment Board (CPPIB). According to the report, the province is entitled to $334 billion of CPP’s assets, or 53 per cent. However, Dan Kelly, president of the Canadian Federation of Independent Business (CFIB), believes that the reality might not align with these estimates.

Kelly mentions that pulling out of the CPP would lead to higher premiums for remaining CPP participants, while the creation of an Alberta pension plan would introduce additional risks. He emphasizes that smaller pension funds carry greater risk profiles and suggests that Alberta might receive a lower share of assets than expected. Thus, the benefits for Alberta businesses and individuals are unclear.

In a survey conducted by the CFIB, it was found that the priority given to the creation of an Alberta pension plan by small businesses has decreased over the years. In 2020, 36 per cent of small business owners listed it as a high priority, whereas in 2023, only 27 per cent considered it to be of high importance. The number of businesses that see it as a low priority has increased from 33 per cent to 38 per cent during the same period.

The Alberta Premier, Danielle Smith, supports the establishment of a provincial-run pension plan and believes that the province would benefit from leaving the CPP. However, Kelly asserts that small business owners are divided on the matter and do not view it as a major priority for the government. Instead, they prioritize initiatives such as lowering the small business corporate tax rate and continuing relief measures for energy prices.

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