When it comes to my politics, I am a pragmatist before anything else. While, I disagree with Michael Chong a lot, it is easy for me to say that his conservative approach to Parliamentary Reform (i.e. Reform Act 2015) was simply brilliant. While, the party I tend to back – the Liberal Party of Canada – never fully accepted it, it is easy to say that the Reform Act tried to get Members of Parliament to stand for their own powers and stand against the powers of intransigence: the leadership class of all parliamentary parties, the Prime Minister and Cabinet and simple interia. While the Reform Act (2015) did not cause the intended changes, it doesn’t mean that the approach did not receive my approval or my continued support. It just means that we – all Canadians – need to come up with a different approach. Accordingly, while my philosophy guides me, it doesn’t hamper my pragmatism.
Consequently, while it is my opinion that the solutions which provide the best outcome are those that both reward the most people and don’t scapegoat the “Other”, it is also my belief that one should listen to both the “choir” as well as to reasonable disagreement. This means hearing the words of all – the words of the left, of the centre and of the right; this means listening to corporate, labour and environmental interests – to try to find an answer to the problems that the larger public is experiencing. Only, in this way, can we find answers and move forward together. For in having a discourse, we can agree on the problems, the political goals and the limitations we are prepared to suffer or endorse.
We have seen that this exchange provides a wonderful result. Since 1763 or 1867 or 1982/3 or 1995, this process has provided a pretty powerful outcome for most people. We can also say that the conversations have also brought up the scars, the mistakes and the wrong headedness of earlier times. From the treatment of Aboriginal People to Japanese Internment, the Chinese Head Tax to the treatment of Viola Desmond and other Black Canadians, this inclusive approach has allowed us to recognize what we have done wrong and how we might move forward together. So askewing compromises is my goal. Rather, policy approaches that come from me tend to push toward conciliation, transparency, conversation and accountability. In Canada, we should be talking about synthesis, integration, improvement and “leveling up”.
So it should not surprise anyone that every so often, a conservative or labour oriented idea might be one which I endorse. With that being said, it may not provide me comfort in knowing that I am supporting someone with whom I disagree. Consequently, today I find myself standing up for the late Premier Ralph Klein, when it comes to the issue of creating an Alberta Pension Plan.
In 2001, the late Premier was a recipient of an Open Letter from Ted Morton, Stephen Harper, Tom Flanagan, Rainer Knopff, Andrew Crooks and Ken Boessenkool. They argued that it made sense to have an Alberta Pension Plan because it would give Alberta some additional “clout” in Confederation. When he addressed the letter in 2003, he said he would study it, but ultimately decided not to proceed. Or as he put it:
“I’m saying these are concerns, these are legitimate concerns,” Klein said. “I’m not convinced yet that our own pension plan, our own police force, and some of these other things are the way to go at this particular time, and to what end.
“But I sense that there is frustration as to the way we’re treated by Ottawa.” (Provincial pension, police to be studied: Klein, CBC News · Posted: Nov 17, 2003 8:14 AM MT | Last Updated: November 17, 2003)
The truth in that answer still holds to this day; for, creating a pension plan will only bring harm to Alberta. I say this because it was obvious to me that Premier Klein used History and not economics or political science as his guide. This is not to say that Premier Klein was a Historian but he did live through some seminal times in our country’s History. He remembered that when Quebec started its pension plan in 1966, it was a “Have” province. At that time, about half of Corporate Canada was headquartered there. In 1966, Canada Pacific was headquartered in Montreal and Shell Canada – founded in Montreal in 1911 – had just been in their Toronto Headquarters for just under a decade. Ralph Klein would have remembered that even with the protection of the QPP, Quebec still became a “Have Not” province. Ralph Klein would have known that a fruitless argument about national unity had caused Montreal to fall from grace. Banks, Insurance Companies and other firms moved out of Quebec. The QPP did not stop that.
In fact, the QPP only caused a bunch of problems. By the early 1980s, it was a well known fact that the QPP had become a political tool of the provincial Government of the Day. Sovereignists wanted to use it as a tool to achieve independence, while Federalists pointed to it as a tool of potential flexibility of our Canadian Federation. So, it probably was not a surprise that questions of its management came to the fore. In 2003, if Premier Klein needed a reason to argue against an Alberta Pension Plan, he got a big one. The Provincial Auditor Doris Paradis listed numerous shortcomings that were the result of the Caisse de dépôt et placement du Québec’s, the fund manager of the QPP, investment in a fashion operation. It turned out that the operation – Montréal Mode – took place under questionable circumstances. The words “conflict of interest” and “nepotism” were thrown around like confetti. The Parti Quebecois was in power and the opposition Liberals enjoyed finding out about allegations and problems that extended back to the founding of Montréal Mode under the previous president.
Now, Licia Corbella, Ted Morton and Jack Mintz might argue that this type of poor oversight would not happen in Alberta. However, I would disagree. Just think about Premier Lougheed. He set up the Alberta Heritage Trust Fund in 1976. It was supposed “to save for the future, to strengthen or diversify the economy, and to improve the quality of life of Albertans.” It was such a good idea that the Norwegians copied it in 1990. All Norwegian politicians – regardless of political party – agreed to save the money in the fund, while subsequent Alberta governments – every Premier since Lougheed – raided our fund. Today, the Norwegians sit on top of a fund that has a value of about a trillion dollars (USD), while Alberta’s has not cracked $30 Billion. Ralph Klein knew that too.
Today, the Kenney Government argues that it could be a better investor of Alberta’s money because Alberta could use our government’s in-house investment manager: the Alberta Investment Management Corporation (AIMCo). The only problem is that the AIMCo has recently shown itself to be less than open and transparent with their actions. When they lost a huge amount of money recently in the market, AIMco didn’t do the right thing. AIMCo didn’t announce the problem to the beneficiaries of their work: the Pensioners and “wanna be ” pensioners of Albertans. Instead, they consulted with the Government and kept quiet. AIMCo’s leadership allowed Alberta’s politicians to decide the fate of the bad news.
When a diligent reporter at Institutional Investor – a New York based publication – reported that AIMCo had lost more than $4 billion dollars, AIMCo originally said that she got her facts wrong. This was because their projections were that the investment strategy would eventually only lose $2.1 billion dollars. This type of behaviour hardly builds confidence and reminds me again of the Caisse de dépôt et placement du Québec, the investment manager of the QPP. While Ralph Klein was not premier in 2009, the Caisse nonetheless reported that it had lost about $40 billion dollars. For, in both cases, the people in charge said that the problems and changes in market condition were unforeseeable; while independent journalists, market analysts said the exact opposite thing.
In the case of Henri-Paul Rousseau the former head of the Caisse de dépôt et placement du Québec, Rhéal Séguin of the Globe and Mail said that Henri-Paul Rousseau “refused to be blamed for the pension fund’s record $40-billion loss in 2008”.
Mr Séguin went on to say:
“Gone was the self-assurance and cavalier attitude that marked (Mr. Rousseau) appearance before the committee a year earlier when the extent of the crisis at the Caisse was not yet fully known. Instead, he was a man on the defensive, refusing to disclose all the information that could explain what went wrong at the pension fund under his watch.”
Sound familiar? The critics of Mr. Henri-Paul Rousseau indicated that he and others have become more interested in the “political and social power” that came along with managing the second biggest pension fund. Mr. Rousseau delved into investing and maintaining Quebec based corporations then he was in getting the best return for the Quebecois. Or to again quote Mr Séguin:
“The Caisse’s leaders probably have no idea of the impact its ill-advised strategies will have on average Quebeckers. And by the sound of Mr. Rousseau’s testimony this week, they probably don’t care much either.
… some National Assembly members questioned the ethics behind Mr. Rousseau’s decision to negotiate a job with Power Corp. while he was still at the helm of the Caisse. There was nothing to indicate a conflict of interest, but there was enough appearance of conflict to make the situation ethically questionable to the public”.
While I might disagree with Ralph Klein, he was no idiot. The 2008 problems with the Caisse de dépôt et placement du Québec – the investment manager of the QPP – were foreshadowed by the 2003 problems that the provincial auditor found. These were problems which any sane individual could foresee if AIMCo became the manager of a future Alberta Pension Plan. This is probably one of the reasons why so many provinces – from BC, Ontario to PEI – have not moved to create provincial plans.
Just look at the History. The Canadian Constitution (called the British North America Act then; now called the Constitution Act (1867)), left the issue of such “public welfare” to the provinces. It’s funny to think about it today, but the Canada Pension Plan (CPP) was only allowed because the provinces gave up power. For the most part, Provinces didn’t want to be responsible for a public pension plan, they just wanted to complain about it, if it was in their political advantage. Just think about Kathleen Wynne and the attempt to create the Ontario Pension Plan. Premier Wynne gave up on the idea once the “Feds” expanded CPP. These are all things that Ralph Klein either knew or could have reasonably anticipated. Mr. Klein didn’t need Kathleen Wynne’s example. These are all the things that Ted Morton, Licia Corbella, Jack Mintz, Stephen Harper, Tom Flanagan, Rainer Knopff, Andrew Crooks and Ken Boessenkool didn’t consider in any of the iterations of an Alberta Pension Plan. Ralph Klein knew from History and Experience that while an Alberta Pension Plan might feel good, it was an inherently bad idea.
As a pragmatist and a lover of history, all of this is obvious to me. While I disagree with his politics, it is easy to see that the former Premier Klein knew a few things. He probably wondered why some would foist upon Alberta an institution which doesn’t work in Quebec? I wonder the same thing too.