Canada says Alberta leaving CPP would add to economic uncertainty
2023.11.03 14:54
© Reuters. FILE PHOTO: Canada’s Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks during a panel on the fourth day of the annual meeting of the IMF and the World Bank, following last month’s deadly earthquake, in Marrakech, Morocco, October 12,
OTTAWA (Reuters) – If the Canadian province of Alberta carries out a threat to withdraw from the Canada Pension Plan (CPP) it would add to economic uncertainty and hurt everyone in the country, federal Finance Minister Chrystia Freeland said on Friday.
Freeland made her remarks at a press conference after a phone call with finance ministers from the provinces to discuss the issue.
Alberta Premier Danielle Smith’s government launched a consultation process asking for the oil-rich province to consider an exit from the CPP, which acts for more than 21 million contributors and beneficiaries across Canada managing C$575 billion ($415 billion).
Smith has said she plans to follow the consultation with a possible referendum in 2025. The Alberta government on Thursday night said proposed legislation would guarantee the same or lower contribution rates as the CPP and the same or better benefits.
The so-called Alberta Pension Protection Act would require Albertans to vote in favor of a pension plan for the province during a public referendum before the provincial government would seek to withdraw assets, said the statement.
Freeland has asked the chief actuary to provide an estimate of the asset transfer based on a “reasonable interpretation”.
But when asked whether she found it realistic that Alberta was entitled to 53% of CPP assets in 2027, according to a study commissioned by the Alberta government, Freeland said she did not.
Freeland also cautioned that the Alberta government would need to negotiate how Canadians could live and work anywhere in Canada without jeopardizing their retirement.
“Alberta would need to negotiate complex time-consuming portability agreements with the CPP and with the Quebec pension plan,” she said. The province of Quebec already has its own pension scheme.
“The Government of Alberta would also need to negotiate international social security agreements to ensure similar treatment of contributors who spend part of their careers abroad.”
Prime Minister Justin Trudeau and opposition Conservative Party leader Pierre Poilievre, are both against the plan.
