‘Would I lie to you?’ It’s hard to believe justification of an APP
By Lethbridge Herald on November 17, 2023.
DAVID B. CARPENTER
Now would I say something that isn’t true?
A former Alberta cabinet minister recently wrote an opinion justifying his government’s position on the APP proposal which I actually read twice.
I had to ensure that it wasn’t an accidental reprint of lyrics originally written by Annie Lennox and Eurythmics. He starts by extolling the virtues of LifeWorks (formerly Morneau Shepell) who prepared the report which Albertans have been asked to accept.
Intriguingly enough, Morneau Shepell sold its business to LifeWorks Inc. on May 17, 2021 and was subsequently traded on the TSX. On September 1, 2022, Telus acquired Lifeworks and on September 2, 2022 LifeWorks Inc. was de-listed from the TSX. On September 21, 2023, over a year after the company had been de-listed, the Alberta government issued a report by LifeWorks supporting its position on the Alberta Pension Plan.
I have read and re-read this report and cannot find any reference to Morneau Shepell so our former cabinet minister might want to exercise some caution as he invokes a name which is not actually included as an author of the report.
Further, nowhere in the document are the actual names of the report’s authors, their academic credentials, their professional affiliations, their office address, their phone number, email address or service address in case one needs to launch suit against them.
All we have is the name of a defunct organization currently de-listed from the TSX. The former cabinet minister suggests Albertans should give greater deference to this report than to the opinions of journalists at the Toronto Star. Maybe that can happen if the report’s authors were not too embarrassed to let their name be associated with the report or if it was actually issued by an existing organization. And to this date no qualified professional has allowed their name to be associated with the APP proposal report. The opinion goes on to discuss how the experts at LifeWorks determined that the government of Alberta is entitled to 53 per cent of the assets of the CPP. For the record, at this point I want to state categorically that I do not believe the rumours that this entire report was prepared by that bright young man in the copy room using ChatGPT, even though there is no evidence that this is not true.
Unfortunately, the former minister takes a liberty or two with the facts when he glosses over the journey to 53 per cent. In fact, the writer(s) of the report conclude that a literal reading of the CPP Act would result in a transfer to Alberta of 117 per cent of CPP assets as of December 31, 2021. Apparently our mystery writer(s) felt that this unrealistically large transfer figure (their actual words) might be a difficult sell as it would require seniors to not only forego their pensions but also to make monthly payments to Alberta.
So they came up with an alternate and in their view reasonable wording change to the law which would reduce the claim to 53 per cent. The report does not say whether the 53 per cent was the determinant of the wording change or whether the wording change was the determinant of the 53 per cent. A chicken and egg issue, I guess. And we can’t really ask anyone, as we haven’t the slightest idea who wrote the report. Maybe it was the copy guy.
Another issue which our former cabinet minister glosses over is the assumption of investment returns. Investment returns are the single biggest component of the fund balance.
CPP is the worldwide gold standard. Alberta’s best is AIMCO which ranks slightly below mediocre. You wouldn’t know it by reading their press releases though. If you want some fun read their report for last year. The headline reads that AIMCO exceeds benchmark over one, four and 10 years. Based on that headline, a rational person might assume that they actually made money last year. In fact, based on the asset profiles which they have chosen, their benchmark was to lose 5.2 per cent or roughly $7 billion. However because of their lightning quick re exes they only lost 3.4 per cent or roughly $4.5 billion. Only the Queen of Disinformation herself could have shown that as a profitt of 1.8 per cent or $2.5 billion.
Nonetheless, AIMCO did return a respectable 7.2 per cent compounded over the 10 year horizon. Not bad but mediocre, almost. And it represents about $180 billion less in returns over that me frame than CPP actually made. So when our cabinet minister talks about splitting up the CPP fund balance how can he possibly assume that Alberta is anywhere near as competent as the CPPIB?
Another question which our former cabinet minister might want to address really relates to what they intend to do with the fund. And please get serious about the balance.
The other premiers are not really dumb as pet rocks. They will protect their seniors. The current wording which the consultant has already allowed is unreasonable will be amended.
There is a legislative process for amending the CPP Act which, shockingly, does not include blind changes by Alberta government consultants who found the law unreasonable. Under Section 114 of the CPP Act the amendment requires the consent of two thirds of the participating provinces representing two thirds of the population. Accordingly, the transfer to Alberta’s jurisdiction will be in the range of $100 billion.
The rights of seniors in the rest of the participating provinces will be protected by their premiers. And Danielle Smith will get the money which is owed to Alberta pensioners. But who will defend seniors’ interests from her?
And if you think these pseudo-Conservatives have the financial ability to properly invest your pension money, just think back one year. In a knee-jerk reaction to solve all the problems in health care Danielle Smith bought $80 million worth of Children’s Tylenol. From Turkey. That’s six bottles of Tylenol per Alberta child. You might remember the sign “Help is on the Way!” When help arrived three months late it had no childproof caps as is required by law. So the drug had to be repackaged. And then they noticed that the labels were not bilingual.
You can’t just assume that everyone is fluent in Turkish. So the Tylenol had to be re-labelled. And then somebody noticed that the dosage was not the same as Canadian Children’s Tylenol so it had to be dispensed by a pharmacist from behind the counter. I do not know what the pharmacists charge for this service. But the Health Minister of the day, Mr. Copping, assured us all that even though it was too late to save the health care system that they would be able to re-sell it to premiers from other provinces. That old pet rock syndrome again. Mr. Copping assured us that they would make a profit.
When I see the audited financial statement certifying the profit from the sale of Turkish Children’s Tylenol I will start to believe that these guys can manage a pension fund. Until then, I keep humming along with Eurythmics.
21-20
Thank you for both the informative and entertaining read.
p.s. I’m joining you in humming along with the Eurythmics!
David your considerable efforts, research, intelligent and pragmatic assessments on this CPP issue have been greatly appreciated. Too bad the UCP premier and cabinet ministers cannot expend as much energy researching their etch and sketch policy processes !
It is astounding how much money this UCP government wastes, again and again, with its fickle and phantasmagorical policy changes, pending legal challenges, and pernicious administration.* Danielle Smith is the Queen of Etch and Sketch, almost as if she lives in this fantasy game akin to some weird Dungeons and Dragons contest. Her anger farming addiction is seriously damaging Alberta — the worst possible leadership skills required in current times.
I wholeheartedly thank you for your sound efforts and input once again.
Note: I can’t help but notice the lack of derogatory responses to your editorial contributions. We normally see several attacks against any contributor offering criticism of UCP policies. Perhaps these individuals have zero fault to make of the wisdom and facts you present… ???
*(millions of dollars in severance pending for recently appointed then sacked AHS management most immediately comes to mind)
if only she was etch-a-sketch…we could then throttle her and reset the lines of lies she has drawn.
It feels like we are dealing with a used car salesman who got elected by bringing 30 year old recommendations of a future PM back to life so she could get elected to lead the UCP.
Excellent article Mr. Carpenter. I look forward to discussing it with you when we run into each other.
So the former Mayor has joined the ranks of opinionated on the Herald site. While he has many opinionated contributions it doesn’t necessarily mean he is correct in all his opinions. Myself, I prefer to wait for the numbers from Freeland and the Federal Government for their numbers before I embark on shoving either Smith’s or Notley’s or for that matter, Carpenters OPINION down anyones throat. Lets use our brain and not be influenced by those who presume they are the smartest ones jn the room.
Well, that’s just your opinion, man.