Freeland says she’s asked chief actuary to determine Alberta’s share of CPP
The federal government will instruct the Office of the Chief Actuary to estimate Alberta’s share of the Canada Pension Plan fund.
“I told ministers today that I would ask the chief actuary to provide an estimate of the asset transfer based on a reasonable interpretation of the provisions in the CPP legislation,” Deputy Prime Minister and Finance Minister Chrystia Freeland said Friday after holding a virtual meeting with provincial and finance ministers.
“Our officials will work together to define the precise taskings for this work.”
Last month, Alberta Premier Danielle Smith released a long-awaited report by consultant LifeWorks. It claims that if Alberta pulled out of the CPP, it would be entitled to $334 billion — more than half of the fund’s assets.
In response to the report and Smith’s plan to pull her province out of the CPP, Ontario Finance Minister Peter Bethlenfalvy wrote to Freeland requesting an “urgent meeting” of finance ministers to address Alberta’s proposal.
After meeting with her counterparts, Freeland delivered a defence of the CPP. She said it provides a stable retirement income for Canadians and underpins Canada’s triple A credit rating.
While Alberta has a right to pull out of the CPP, Freeland said, it would be a complicated process requiring that the province strike reciprocal agreements with other provinces and countries. Only by doing that will Canadians who worked in different provinces or countries be assured of a stable income regardless of where they decide to retire, she added.
“I do think that it’s so important for us to remember two things as we work on this together. The first is how important pensions are to Canadians … The second thing … is to remember that Canada is best when we work together,” she said.
Alberta seeking ‘firm asset transfer number’
Alberta’s Minister of Finance Nate Horner issued his own media release after the meeting saying the creation of an Alberta Pension Plan would take place only if Albertans voted for it in a referendum.
“We are encouraged to hear the federal government commit to providing a comprehensive actuarial analysis of the asset transfer value Alberta would be entitled to receive should it withdraw from the CPP,” Horner said. “We’ve been asking for this for several weeks.”
Horner said Albertans need a “firm asset transfer number” so they can “make an informed decision.”
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Deputy Premier and Minister of Finance for Saskatchewan Donna Harpauer issued a statement after the meeting saying “there was strong support from across the country for the CPP and its support for our residents thus far.”
Harpauer added that her counterparts at the meeting recognized the “need for fairness for all Canadians when it comes to the” CPP.
Bethlenfalvy told CBC News Network’s Power & Politics in an interview airing Friday that he hopes the chief actuary can “provide some rigour on a very complex and complicated set of numbers with a lot of moving parts.”
“I’ve very encouraged,” he told host David Cochrane. “Its a step forward in the process.”
Challenging the numbers
Critics have ripped into the math underlying the conclusions in the LifeWorks report.
Michel Leduc is senior managing director of the non-partisan Canada Pension Plan Investment Board, which manages the fund’s assets for Canadians. He immediately dismissed the $334 billion claim as an “impossible figure.”
University of Calgary economist Trevor Tombe published a paper estimating that Alberta is entitled only to about 20 to 25 per cent of the fund.
“I think it was a little problematic that the government’s hanging its hat on half the CPP assets, which you think is kind of transparently unreasonable and not going to fly anywhere else in the country,” he said.
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A 2019 briefing note from Alberta’s Finance Department to Travis Toews, who served as finance minister to both Smith and former premier Jason Kenney, estimated Alberta’s slice of CPP assets at less than 12 per cent.
According to the first major poll conducted since Smith began making the pitch to take Alberta out of the CPP, the proposal is widely opposed by Albertans.
Fifty-two per cent of Albertans polled by Abacus Data said they think it’s a bad or very bad idea, compared to 19 per cent who think it’s a good or very good one, and 15 per cent who are in the middle.
The few who support it are overwhelmingly younger Albertans — those farthest away from receiving pensions who are therefore less vulnerable to dramatic changes to the retirement fund.
