Ontario’s finance minister has written Deputy Prime Minister and Finance Minister Chrystia Freeland asking for an “urgent meeting” of federal and provincial finance ministers to address Alberta’s proposal to pull the province out of the Canada Pension Plan.
Peter Bethlenfalvy’s letter comes a week after Prime Minister Justin Trudeau wrote an open letter to Alberta Premier Danielle Smith attacking her plan to pull out of the CPP as a risk to “certainty and stability.”
“While we will always maintain our respect for Alberta, our government firmly supports the CPP and shares your serious concerns with Alberta’s proposal to withdraw from it,” Bethlenfalvy said in his letter.
Ontario’s finance minister said his province respects the role Alberta plays in Canada’s economic success, and will continue to support its energy sector, but the CPP’s strength is its national scope.
“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 said in the letter.
Bethlenfalvy’s arguments are similar to words Trudeau used in his letter last week.
“With all the uncertainty they face, Canadians should not have to worry whether or not the Canada Pension Plan will continue to be there for them in their retirement,” Trudeau wrote.
Conservative Leader Pierre Poilievre issued a statement last week saying Alberta’s premier is only picking a pension fight with Ottawa because the Liberal government has saddled the province with “carbon taxes, unconstitutional anti-energy laws and other unfair wealth transfers.”
“I encourage Albertans to stay in the CPP,” Poilievre said, adding he will “protect and secure the CPP for Albertans and all Canadians” by being a prime minister that lets Alberta “develop its resources to secure our future.”
Challenging Alberta’s assumptions
Last month, Smith released a long-awaited report by consultant LifeWorks claiming that if Alberta pulled out of the CPP, it would be entitled to $334 billion — more than half of the fund’s assets.
Smith has long called for Alberta to leave the CPP and told reporters after the release of the LifeWorks report that “an Alberta pension plan would be fairer and could make life more affordable for all Albertans.”
Critics of Smith’s plan have ripped into the math underlying the conclusions in the LifeWorks report.
University of Calgary economist Trevor Tombe published a paper estimating Alberta is entitled to only 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 … is kind of transparently unreasonable and not going to fly anywhere else in the country,” Tombe said.
Michel Leduc, senior managing director of the non-partisan Canada Pension Plan Investment Board, which manages the fund’s assets for Canadians, dismissed the $334-billion figure, claiming “it’s basically invented.”
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.
Bethlenfalvy’s letter joined in on that criticism, saying the CPP “belongs to all workers and beneficiaries across Canada” and that if Alberta wants to leave, the CPP “must be divided fairly.”
“To that end, we would also welcome a rigorous analysis of the assumptions that Alberta’s proposal is based on,” the letter said.
A possible referendum
Alberta has floated the idea of holding a referendum on withdrawing from the CPP as early as 2025.
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.