Hello Chestermere! To begin, congratulations to the Chestermere Rec Centre on hosting a very successful arts and craft sale. I was able to get so much of my Christmas shopping under control. It was wonderful to see so many of you out and about. It’s a big win-win for everyone when we “shop local” if possible and support our hard-working small business neighbours!
I am very happy that the government has funded the Langdon Junior/Senior High School. This was a critically needed project in one of Alberta’s fast-growing communities and will also take pressure off Chestermere High School. Thanks to all the parent and student advocates. Your voice was heard! Thanks is also due to Rocky View County and Rocky View Schools for ensuring the site was ready. This is a huge win for education in Chestermere, Langdon, and SE Rocky View County.
November is Family Violence Prevention Month. The Government of Alberta uses this month to share resources and information to let people know where to turn and get help. Wearing purple, or a purple ribbon, is also a well-known symbol for the acknowledgement of this month. Resources, information and promotional materials can be accessed and downloaded by visiting alberta.ca/EndFamilyViolence.
You may have seen some stuff in the media about oil curtailment. Curtailment was necessary to protect the price of Alberta heavy oil and the royalties that benefit every Albertan. As you know the previous NDP government, just prior to the election, decided to spend 3.7 billion dollars of taxpayers’ money to lease 4,400 rail cars. This decision put all the risk on the shoulders of taxpayers. We committed to protect taxpayers and we are doing so by offloading these contracts to the private sector. As an incentive to producers the Minister Of Energy will relax curtailment to producers who can move incremental oil by rail.
Through this allowance, we are protecting the value of Alberta’s resources and reinforcing that Alberta is open for business. The special production allowance program allows for temporary curtailment relief equivalent to incremental increases in rail shipment to the benefit of oil producers and Albertans. We are planning to have the new changes in place for the December production month and operators will apply month to month to increase their production.
The lack of pipeline capacity combined with hostile Federal legislation has dealt a serious blow to Alberta’s economy. When companies such as Encana move their head office from Alberta they are saying that there are better opportunities elsewhere and we are committed to changing that.
Let’s talk about the public sector. The MacKinnon Report clearly identified that Alberta’s public sector wages are significantly higher than those in similar provinces. Part of demonstrating that we are an attractive place to do business is getting our fiscal house in order.
Finance Minister Toews commented: “During better times, public-sector wages rose rapidly – far faster than inflation and population growth. We greatly value the contributions of Alberta’s public sector workers. At the same time, we cannot ask Alberta taxpayers to fund public-sector pay raises during a time when far too many workers in the private sector have lost their jobs and many others have seen significant pay cuts in recent years. We are all in this together as Albertans. We all have to do our part to live within our means, and that includes government. Our MLAs have rolled back their salaries by five per cent and the Premier has cut his salary by 10 per cent. This is on top of five per cent cuts to MLA salaries a few years ago. Public-sector pay accounts for over half of government expenses, and compensation for public-sector workers in Alberta is, in most cases, significantly higher than in other comparable provinces. During better times, public-sector wages rose rapidly – far faster than inflation and population growth. There will be a 2019 wage reopener and a revision that looks for an average of a 2% reduction for those collective agreements. Each one per cent increase of the $26.9 billion spent annually on wages means an additional $270 million cost to taxpayers, forcing a choice between higher taxes for Albertans at a time when they are facing economic uncertainty or cuts to government programs.”
Small business owners tell me they are barely surviving and we all know people who are faced with losing their homes and potentially having to leave the province altogether. We have to reduce costs to the taxpayer.
Let’s talk about pensions. Trevor Gower asked the Premier: “will you be taking control of Alberta’s CPP and creating a provincial pension plan?” Premier Kenney responded: “Well Trevor, I can certainly tell you that will be one of the issues studied by the panel that I will be appointing to consult with Albertans on fighting for a fair deal in Canada. I believe that a compelling case can be made for such a shift. We want to listen to Albertans on this first. But let me just say that with the youngest population in Canada, we are by far the largest net contributor to the CPP. The federal government, against our government’s wishes, is imposing higher CPP payroll taxes, which will decrease economic growth and kill jobs – even though we, with this young Alberta population, do not need and cannot justify higher premiums. I would go on to say that in Alberta we’ve created a very successful world-class institutional investor, AIMOCo – the Alberta Investment Management Corporation – that handles about $100 billion of assets for Alberta taxpayers. They manage the $17 billion of assets of the Alberta Heritage Savings Trust Fund, as well as some endowments and almost all of our government public sector pension plans. In fact, through last week’s budget, we will ensure that all of the taxpayer-supported Alberta Government pension plans will have their assets managed by AIMCo so that they can get better rates of return with lower administrative costs. So we understand, I understand that there’s about $40 billion of Albertans’ premiums under management by the Canada Pension Plan Investment Board. And if, in principle, we could transfer those assets to be managed securely by AIMCo, that would also help AIMCo to be a stronger asset manager. It would be able to participate in larger deals, invest in a larger class of assets to further diversify their investment portfolio and improve returns over time. So those are some of the arguments that I anticipate will be made in favour of prospective transfer to an Alberta Pension Plan, mindful that Quebec has quite responsibly managed their own Quebec Pension Plan outside of the CPP for the past sixty-some years. But let me underscore that the Government has not made any decision in this respect, but it is certainly one of the ideas that people will be presenting to our panel on fairness within the federation.”
On the issue of transferring management of the Alberta Teachers Retirement Fund (ATRF) to AIMCo the Premier had this to say: “Here is how it could work. From August 2017 to August 2018, ATRF had a return of 9.6 per cent. Over the same time period, AIMCo outperformed ATRF with a return of 9.8 per cent. When you look at a four- year average, AIMCo again outperformed ATRF. But ultimately, the real gain here is the substantially larger investment pool managed by AIMCo which will lead to significantly lower administration costs for the ATRF. This change will redirect administration funding into the overall health of the fund, protecting both teachers and taxpayers. The broader use of AIMCo is a reflection of our commitment to make government more efficient and ensure the best use of taxpayer dollars. We have proposed moving the ATRF assets under AIMCo to reduce redundant investment management costs and yield higher investment returns. Here is what AIMco currently does:
• AIMCo currently manages a number of public sector pension plans, such as the Local Authorities Pension Plan, with strong results.
• AIMCo has comparable investment returns to ATRF. However, AIMCo has substantially more assets under management than ATRF which provides it with economies of scale that will lower the administrative cost of investing.
• AIMCo estimates that ATRF’s administrative fees will decrease by 0.25% when the change is fully implemented, bringing investment costs in line with other pensions managed by AIMCo.
• This will result in estimated annual savings of $41 million.
• This works out to almost $500 annually for each teacher that contributes to the Fund, directing funds to the health of the plan, rather than administration.
There will be no changes to pension benefits. And the Alberta Teachers’ Retirement Fund board will have the control and will remain to oversee the pension, how it is invested, and will keep ownership of the assets. Teachers continue to benefit from a 2007 agreement that saw government assume the teachers’ portion of an unfunded liability which was valued at $2.2 billion at the time.”
To close, the opposition is misrepresenting changes to charity funding from gaming. We dissolved the Lottery Fund as a standalone account to streamline government and find efficiencies. This is a cash flow management efficiency that will save the government $13 million in debt servicing costs. This is a good thing as our debt servicing today stands at 2 billion per year. Charities currently receive 15 per cent of the proceeds generated from slot machines in charitable casinos and they will continue to do so. As always we love to hear from you.