Prime Minister Justin Trudeau has entered the Alberta pension debate, saying his government will fight any actions that threaten the stability of the Canada Pension Plan. Trudeau arrives at the Canada-CARICOM summit in Ottawa on Wednesday, Oct.18, 2023. THE CANADIAN PRESS/Sean Kilpatrick
EDMONTON – Prime Minister Justin Trudeau entered the Alberta pension-exit debate Wednesday, telling Premier Danielle Smith in a letter that the federal government will fight any threat to the stability of the Canada Pension Plan.
Smith fired back within hours, calling Trudeau’s letter “overwrought” while questioning the honesty of the board that oversees the Canada Pension Plan.
“Withdrawing Albertans from the Canada Pension Plan would expose millions of Canadians to greater volatility and would deny them the certainty and stability that has benefited generations,” Trudeau said in the letter.
“I have instructed my cabinet and officials to take all necessary steps to ensure Albertans – and Canadians – are fully aware of the risks of your plan, and to do everything possible to ensure CPP remains intact.
“We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians.”
Trudeau also took Smith to task for starting the debate in the first place.
“External forces and events – from geopolitical unrest to climate change, and more – are having a direct impact on people here at home,” he wrote.
“As leaders, we have a duty to protect Canadians from these headwinds – not to introduce even more uncertainty and instability.”
Smith responded at an unrelated news conference in Medicine Hat, Alta.
She criticized the letter and emphasized that should Alberta leave the Canada Pension Plan the impact on the rest of Canada would be minimal.
“I think (Trudeau’s) letter was inappropriate in tone. It was overwrought,” said Smith.
“The prime minister is dramatically overstating the issue.”
She said if Alberta left the Canada Pension Plan, “the (financial) effect on the rest of the country would be relatively small because it’s a much larger population.”
Trudeau’s comments came a day after the Canada Pension Plan’s investment board, or CPPIB, asserted Alberta’s messaging and public opinion surveys on leaving the plan are biased, unfair and manipulative.
Alberta’s $7.5-million advertising campaign and its online public survey focus on the findings of a third-party report commissioned by the province. That report, by pension analyst LifeWorks, calculates Alberta is owed more than half the $575 billion in the Canada Pension Plan fund, and states a provincial plan could offer lower contributions and higher payouts to retirees.
In an open letter Tuesday, the Canada Pension Plan board said the province is not giving its citizens the true picture by failing to spell out the potential risks and drawbacks of one province going it alone on pensions.
In response, Smith said Wednesday, “I don’t know that (the CPP board) are necessarily an honest, independent third party. I think they have a vested interest in us not having this conversation.”
Alberta Opposition NDP Leader Rachel Notley said Smith’s United Conservative Party government is not giving Albertans a fair look at the risks and rewards. She said the government’s online public survey doesn’t ask Albertans straight up whether they want to stay or leave the Canada Pension Plan, but asks them what kind of Alberta plan they would like to see.
“Albertans already have a very clear view of this,” Notley told reporters in Edmonton.
“Albertans understand that Danielle Smith is spending money right now not on an objective consultation but rather on a biased propaganda campaign rife with misinformation.”
Smith has tasked former Alberta treasurer Jim Dinning with gauging public opinion on whether there is an appetite in the province for leaving the Canada Pension Plan. If so, a referendum would be called to put the question to Albertans.
The pension exit issue has been bubbling for years in Alberta. In 2019, the UCP government struck a panel that ultimately recommended the issue be investigated.
Critics, including the NDP, said public opinion surveys have consistently shown majority support for staying in the plan.
Along with the online survey, Dinning’s panel is holding a number of telephone town halls and has promised in-person sessions in December.
On Monday’s inaugural telephone town hall, callers sought more details on how the plan would work, including how it would be managed. Some questioned the LifeWorks numbers and one caller suggested the province seek a second opinion.
Dinning defended the LifeWorks report, saying, “The only actuarial study that’s been done is the one that the government has released.”
The Canada Pension Plan investment board estimates Alberta would be entitled to about 16 per cent of the plan’s assets.
The board also released Tuesday a third-party analysis of the Alberta consultations. That analysis, by Innovative Research Group, questioned how seriously Smith’s government is taking the consultations as decisions appear to have already been made.
The report pointed out that last week Alberta Finance Minister Nate Horner publicly rejected using the Quebec pension fund investment model for an Albertan plan, even though Smith had said that would be up to Albertans to decide.
Horner’s office has declined repeated requests to clear up the confusion, leaving Horner on record saying the Quebec model is out while his spokesperson Savannah Johannsen has said the Quebec model is in.
NDP finance critic Shannon Phillips said the entire affair should remind Albertans that Smith’s government would be challenged to “organize a two-car parade.”
This report by The Canadian Press was first published Oct. 18, 2023.
