June 22nd, 2024

Finance ministers to meet on Alberta’s proposal to leave Canada Pension Plan

By Allison Jones, The Canadian Press on October 25, 2023.

Ontario Finance Minister Peter Bethlenfalvy speaks at the Chinese Centre of Greater Toronto in Scarborough, Ont., on Friday, March 24, 2023. Bethlenfalvy is asking federal Finance Minister Chrystia Freeland to convene a meeting to discuss Alberta's proposal to withdraw from the Canada Pension Plan, saying the plan could cause "serious harm."THE CANADIAN PRESS/Nathan Denette

TORONTO – Finance Minister Chrystia Freeland agreed to convene a meeting with the finance ministers to discuss Alberta’s proposal to withdraw from the Canada Pension Plan.

This comes after Ontario’s finance minister called for a meeting in a letter to Freeland, saying Alberta’s withdrawal could cause “serious harm.”

Peter Bethlenfalvy wrote to Freeland to ask for a federal-provincial-territorial meeting of finance ministers, saying Ontario shares Freeland’s serious concerns about Alberta’s plans.

“We believe this proposal could cause serious harm over the long term to working people and retirees in Ontario and across Canada,” he wrote.

Speaking in Calgary, Freeland said any province has the right to leave the program, but it’s important that the decision “be based on facts and be clearly and well informed.”

“It is absolutely my conviction and the federal government’s conviction that the CPP works really, really well for all Canadians, for all Albertans, and I am looking forward to the opportunity to discuss that further with the finance ministers of all the provinces and territories in the days to come,” she said.

Nate Horner, Alberta’s finance minister and president of the Treasury Board, wrote in his own letter Wednesday to Freeland suggesting that the next finance ministers’ meeting be held in Calgary.

“I recommend that Alberta’s potential establishment of an Alberta Pension Plan be on the agenda, and we welcome a good-faith, rigorous analysis of the CPP Act withdrawal formula in advance of that meeting,” he wrote.

Prime Minister Justin Trudeau weighed in Wednesday, saying that the CPP has delivered solid pensions for millions of Canadians.

“The idea that Alberta might not just make their own pensioners poorer by pulling out, but impact Canadians from coast to coast to coast is not something that most Albertans would want, let alone most Canadians,” he said in Ottawa.

The Alberta government commissioned a report that said the province would be entitled to leave CPP with $334 billion, more than half of the fund’s assets.

That report cited Alberta’s relatively younger working population, higher incomes, fewer seniors drawing CPP and years of high contributions from people in the province.

The Canada Pension Plan Investment Board has estimated Alberta is owed about 16 per cent of the fund.

Bethlenfalvy said he would welcome a “rigorous analysis of the assumptions” that Alberta is using to justify its plan.

“At a time when economic challenges are putting pressure on household budgets, the people of Ontario and Canada should not have to worry about the security of their retirement savings or the possibility of costly increases to contributions,” he wrote.

In Edmonton Wednesday, Alberta Premier Danielle Smith told reporters she is happy to have a meeting of finance ministers, with issues such as the carbon tax and equalization part of the discussion.

“The pension contributions are just one aspect of how federal programs consistently disadvantage Alberta,” Smith said.

“Alberta is always paying more and always receiving less in benefits. It just so happens that the Constitution under Section 94 allows us to be able to make a decision to have our own pension.”

This report by The Canadian Press was first published Oct. 25, 2023.

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