Alberta Premier pro tem Dave Hancock, who does not appear exactly as illustrated, of course, pictured on a Get Out of Jail Free card given him today by Calgary Mayor Naheed Nenshi. Below: Mr. Nenshi and the real Mr. Hancock.

Calgary Mayor Naheed Nenshi handed Alberta Premier pro tempore Dave Hancock a Get Out of Jail Free card today.

It may not seem that way at first blush, but when Mr. Nenshi wrote Premier Hancock assailing Finance Minister Doug Horner’s Alison-Redford-era legislation allowing the province to gut Alberta public sector pensions, he did the government a huge favour.

Bill 9, as the Public Sector Pensions Plans Amendment Act is known at this stage of its legislative life, is probably the most serious political problem facing the Progressive Conservative government at this rather fraught moment in its history.

One way or another it impacts the retirement security of approximately 300,000 Albertans who are either public employees or public sector retirees, as well as their spouses and families. In some cases, especially younger workers and women, the potential impact is quite severe – a bad enough deal to make significant numbers ponder leaving the public service over the next couple of years if the legislation becomes law.

Talk about a difficult legacy for Mr. Hancock, who was always rumoured to have opposed his predecessor’s various attacks on the public sector. As a result, something like 600,000 Albertans have been politically awakened by the former Redford Government’s bonehead play on pensions. And they are not happy with the Tories!

Indeed, and herein lies the government’s problem, they are unhappy enough to abandon the coalition that saved Ms. Redford’s government in April 2012, which in many Alberta ridings would be enough to end the careers of the previously unassailable Tory MLAs.

So when Mr. Nenshi’s letter, bearing Friday’s date, turned up in Mr. Hancock’s mailbox and begged him to hang fire on implementing the law because of the problems it will cause municipalities like Calgary, it handed the premier a wonderful opportunity to wiggle out of the most serious problem faced by the government he was chosen to preserve until a permanent saviour can be found.

No matter that the letter appears to have been leaked by Alberta Liberal MLA Kent Hehr. The prevailing wisdom is that while the government long ago realized Bill 9 and its companion private-sector law, Bill 10, were impetuous, foolish and based on a grave political miscalculation, it was reluctant to back off for fear of appearing to cave in to public sector unions.

Mr. Nenshi’s complaint that the law would “gravely impact the City of Calgary,” and moreover “have a crippling effect on our labour force, our operations and our finances,” gives the government a presumably welcome fig leaf to let the bills die on the order paper and make the problem go away before a new permanent leader is chosen.

Thanks to Mr. Nenshi, Mr. Hancock and company can say they’re dropping the bill because of the concerns of municipal politicians – and it’s not just Calgary politicians, by the way, who are very unhappy about it – never mind what those unions have to say.

Indeed, there’s even a school of thought out there that Mr. Hancock or someone in the government asked Mr. Nenshi to send the letter to get them off the hook, and regardless of that, this development is certainly not going to displease undeclared leadership candidate Jim Prentice, who is widely perceived as the party’s political redeemer.

Just days ago, of course, both Mr. Hancock and Mr. Horner, who also may or may not be a leadership candidate, were manfully defending the government’s program of pension changes. But that was then.

Anyway, the Opposition parties are unlikely to give the government too a hard time for dropping the bill since all three of them, including the Wildrose Party, are opposed to the plan and have indicated they will scrap it if they get the chance.

So it hardly matters under the circumstances that Mr. Nenshi’s criticisms echo many of the points made by the unions. To wit, among other things:

  • Calgary was not adequately consulted
  • The bill “will increase the number of employees who opt for early retirement or leave for more lucrative positions in the private sector”
  • The largest public sector pension plan “already has a plan to address its unfunded liabilities”
  • Eliminating the plan’s guaranteed cost of living adjustment “will adversely impact recruitment and retention”
  • The proposed changes would also “increase administrative costs”
  • It could “have an adverse effect on labour relations”

“Enacting Bill 9 in its present form will adversely affect the administration, finances and the labour force of The City as well as the ability of The City to provide effective services to all its citizens,” Mayor Nenshi’s letter concluded. “The reform will create a dangerous incentive for our workforce to either take early retirement before 2016 or enter into the private sector.”

He’s not opposed to pension reform, he noted, but “Bill 9 needs considerable work.”

In addition to giving Mr. Hancock the opportunity to fix a serious problem bequeathed to him by fired premier Redford, Mr. Nenshi’s letter seems to have considerably enhanced his image and popularity outside Calgary – especially, not surprisingly, among the “progressive coalition” that backed Ms. Redford in 2012.

That will probably not mean much in the short term while we wait to see if the government will grasp the lifeline thrown to it by Calgary’s mayor, but, this being Alberta, it could have some interesting implications a little farther down the line.

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  1. Bill 10, the Employment Pension (Private Sector) Amendment Act has received far less attention than Bill 9. It gives the government the right to make retroactive changes to pension entitlements and to convert pension entitlements to “defined contributions.” This means that people in plans that are not administered by the government may experience the same rollbacks that the government wishes to impose on workers inside plans managed by the government. The Tory government obviously hopes to rally to their side those who resent the idea that anyone should get a “defined benefit” pension. Frankly, until about two decades ago, virtually all pensions in Canada were defined benefit pensions that gave employers and pension managers the responsibility to insure that plans were managed in ways that would insure that promised benefits would be paid. The notion that employers should have the opportunity to take their workers’ pension contributions and play the stock markets with them, simply cutting the pension payouts if such investments go south, is immoral. It originated with General Pinochet, the butcher of Chile, who was able to use his dictatorship to destroy existing worker pensions in favour of these con-artist pensions (he got the idea from Milton Friedman, who, pre-Thatcher and Reagan was regarded as a wingnut whom only military dictators could listen to seriously). Wealthy corporations and their public relations armies then fanned out everywhere to con people into thinking that the successful defined benefit pensions of the post-war period were no longer feasible and workers should have to pay more into plans only to get less. Scandinavia’s experience demonstrates that this is a lie.

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