Alberta Threatens Breakaway From Canada Pension Plan

Provincial leaders want more independence from the federal government and commissioned a report to study potential financial terms of a separate fund.

Provincial leaders in Alberta have floated publicly the possibility of withdrawing assets of Alberta residents from the Canada Pension Plan by 2027 and released on Thursday the findings of a report commissioned by the provincial government analyzing and detailing the benefits and risks of such a move.

Consultancy Telus Health, formerly LifeWorks, calculated the potential share of CPPIB assets to which Alberta would be entitled, using the amount Alberta residents contribute, subtracting their benefits payments and taking into account the CPP’s expenses and investment returns. The C$575 billion pension plan, managed by the Canada Pension Plan Investment Board, provides retirement income and benefits to residents of all Canadian provinces except Quebec.

Commissioned by Alberta’s government, the report estimated that the province’s residents are entitled to C$334 billion, more than half of the CPP’s assets, backing provincial officials’ claims that Alberta contributes a disproportionately large amount to the CPP due do its significant oil and gas business. Former Alberta Premier Jason Kenney proposed a separate Alberta pension plan in 2020.

Alberta Premier Danielle Smith, herself elected in October 2022, led her provincial United Conservative Party to a May election victory in provincial elections and immediately began sparring with the national government and Prime Minister Justin Trudeau about climate change, referencing “soon-to-be-announced Ottawa policies” in her election night address. The report’s release is a significant political play following recent disagreements over plans to regulate the oil and gas industry.

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Smith issued a strongly worded media statement in late August in anticipation of the October release of a draft proposal of the national government’s plans to cap greenhouse gas emissions.

“We would strongly suggest the federal government refrain from testing our government’s or Albertans’ resolve in this regard,” the release stated. “Under no scenario will the Government of Alberta permit the implementation of the proposed federal electricity regulations or contemplated oil and gas emissions cap.”

Any decision on an Alberta pension plan would have to be approved through a provincial referendum. A poll from earlier this year showed that only 21% of Alberta voters were in favor of the idea of withdrawing from the Canada Pension Plan. In the poll, the highest percentage of supporters came from the 18 to 34 age group, with 29% support. The 55-and-older age group largely opposed the idea, with 65% of those polled against it.

The province launched a website for the plan, indicating that if a referendum were held, it could be sometime in 2025. The site lists steps that must occur before an Alberta pension plan could be established:

Engagement and consultation with Albertans to determine whether there is sufficient interest in holding a referendum on establishing an APP;
Give written notice of Alberta’s intent to withdraw from the CPP;
Draft legislation to set up the APP;
Develop agreements to coordinate benefits with the CPP, the Quebec Pension Plan and international social security agreements for Albertans working and living abroad.

Tags: Alberta, Alberta Pension Plan, Canada, Canada Pension Plan, CPP, CPPIB, Danielle Smith, Jason Kennedy

Tomas Arlia

Fintech startup Arta Finance has hired Tomas Arlia as CIO and head of alternative assets.

Arta is a fintech startup that allows retail investors access to alternative investments like private equity, venture capital, private credit and real estate. Users can start investing in the asset classes with as little as $2,500, although in the U.S., users must be accredited investors to use the platform.

The Mountain View, California-based startup was launched in 2021 by former Google executives and emerged in 2022 with $90 million in funding from investors including Sequoia Capital, Coatue Management LLC and former Google CEO Eric Schmidt.

“We are thrilled to have Tomas heading up our private markets and alternative investments at Arta,” said Caesar Sengupta, Arta’s co-founder and CEO, in a statement. “His deep expertise in this space, along with his leadership experience and global knowledge, make him an ideal addition to develop our private markets offerings. Arta’s mission is to provide access to the kinds of investment opportunities long available only to the ultra-wealthy, and Tomas is the leader to bring this mission to life.”

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Arta describes itself as a “digital family office” where individuals will have access to alternative asset classes previously only available to institutions and the “ultra-wealthy.”

Prior to joining Arta, Arlia was CIO at DoubleBlue Capital Management, a firm focused on private credit and equity direct investments. He was also CIO and, before that, managing director of hedge funds at GE Asset Management, where he oversaw $3 billion in hedge fund investments and $1 billion in private equity funds. Previous workplaces include McKinsey & Co.

Arlia said he will focus on three main issues common to retail investors and alternative investments: access, complexity and liquidity. Arta aims to make access to alternatives accessible with an app. Arlia will also oversee Arta’s market strategy and lead Arta’s asset allocation and portfolio construction.

“In an environment where the age-old bastions of financial security—corporate pension plans and traditional family offices—are either evaporating or unattainable for most, now is the right time for a digital family office,” Arlia said in a release. “As the head of alternatives, I’m excited to help lead a shift in financial inclusivity.”

Arlia, originally from Argentina, earned a bachelor’s degree in business administration from Georgia College, where he was Peach Belt Conference Scholar-Athlete of the Year as a golfer, and an MBA from Dartmouth College’s Tuck School of Business.

Tags: Arta Finance, Caesar Sengupta, Tomas Arlia