June 15th, 2024

Alberta, Ottawa demand accountability ahead of meeting on Alberta CPP-exit proposal

By Dean Bennett, The Canadian Press on November 1, 2023.

Deputy Prime Minister and Minister of Finance Chrystia Freeland holds a press conference in Ottawa on Tuesday, Oct. 31, 2023. The Alberta and federal governments, in duelling letters, each called on the other to be transparent and accountable when it comes to the province’s proposal to quit the Canada Pension Plan. THE CANADIAN PRESS/Sean Kilpatrick

EDMONTON – The Alberta and federal governments are calling on each other to be transparent and accountable ahead of a national meeting Friday on the province’s proposal to quit the Canada Pension Plan.

The two sides exchanged duelling public letters Wednesday as federal Finance Minister Chrystia Freeland prepares to host the virtual meeting of finance ministers from across Canada to discuss Alberta’s CPP-exit campaign and its ramifications for the rest of the country.

Alberta Finance Minister Nate Horner, in his letter to Freeland, asserted Ottawa has private data that could affect his government’s claim that Alberta is entitled to 53 per cent of CPP assets if it leaves to run its own program.

Alberta, citing a third-party analysis it commissioned, calculates it should receive $334 billion from the CPP – a figure tied to how much Alberta-based workers have paid linked to compounded investment returns.

Economists and the CPP investment board calculate that number to be far less and more in line with Alberta’s CPP population representation of 15 per cent.

“We expect that the federal government has access to non-public data sources that could impact the calculation of the ($334-billion) asset transfer amount,” Horner wrote to Freeland.

“For this reason, we request that you provide your calculation of the asset transfer amount together with the underlying data supporting the calculation.”

The $334 billion is the central number around the debate that began a month ago and has rippled across the country, sparking concern on what an Alberta pullout would mean for everyone in the CPP.

Quebec is the only province not part of the national plan, as it set up its own system when the CPP was created in the mid 1960s.

Alberta Premier Danielle Smith’s government is spending $7.5 million on an engagement campaign with Albertans that touts the benefits and downplays the risks of the province going it alone.

Freeland, in her letter Wednesday to Smith, said Albertans need to be fully informed on the benefits of staying in the CPP and the risks of opting out.

“Between 2013 and 2022, CPP Investments delivered the highest ten-year returns of any pension fund in the world,” wrote Freeland.

“The CPP is the foundation of a secure and dignified retirement for tens of millions of Canadians – including Albertans.

“If Alberta were to withdraw from the CPP, the retirements of millions of Albertans would be at risk.

“While Alberta has a right to withdraw should it so choose, Albertans deserve to know that doing so would be a historic, costly and irreversible mistake.”

Smith said she is waiting to hear back from a public engagement panel on whether there is sufficient interest from the public to merit a referendum on leaving the CPP.

The referendum, should it come to pass, has been tentatively scheduled for 2025.

That date was thrown into doubt last week when Smith, acknowledging that Albertans want a firm figure on how much Alberta will get from the CPP, said there would be no referendum until a hard number is nailed down.

Smith said if Alberta and the federal government can’t agree on a number, the matter may have to be resolved through the courts – an option that could take years.

During question period Wednesday, the Opposition NDP said thousands of Albertans are telling the party in overwhelming numbers they don’t want to leave the CPP.

Finance critic Shannon Phillips called on Horner to name a referendum date and settle the issue once and for all.

“How long do we have sit through this propaganda?” said Phillips.

Horner responded, “One thing that we’ve been very clear on is that this cake isn’t baked.

“We have not decided to proceed to a referendum. We’ve decided to continue with this conversation and engage with Albertans.”

This report by The Canadian Press was first published Nov. 1, 2023.

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