Alberta’s Quest to Quit CPP Encounters Opposition and Uncertainty
The road to Alberta’s departure from the Canada Pension Plan (CPP) is set to clash with the provincial election in 2027, as the New Democratic Party (NDP) vows to halt the plan if they come to power. Samir Kayande, the opposition’s finance critic, asserts that the NDP government would cancel the CPP exit on that date, even if Albertans vote in favor of leaving the CPP through a referendum. According to Kayande, the people of Alberta have already expressed their discontent with Premier Danielle Smith’s United Conservative Party administration meddling with the $575-billion retirement fund. Kayande emphasized that the NDP does not require a referendum to oppose the cancellation of the CPP, as the public has already made their stance clear. He even welcomes the possibility of contesting an election solely on this issue in 2027.
This statement follows Premier Smith’s announcement that the Alberta government plans to engage with Albertans regarding a potential referendum on departing from the CPP and establishing a separate Alberta pension plan. As per the Alberta government’s website timeline, any referendum would likely take place in 2025. However, leaving the CPP necessitates a three-year notice, and the next provincial election is scheduled for May 31, 2027.
Smith’s government intends to retain more than half of the CPP fund if Alberta withdraws, basing this claim on a third-party report commissioned by the province. The report asserts that Alberta is entitled to $334 billion if it secedes from the CPP in 2027. However, analysts argue that these figures are predicated on flawed mathematical assumptions and interpretations of the governing legislation. Even if the projected amount were accurate, Ottawa and other provinces are unlikely to consent to allowing 12% of Canada’s population to exit while retaining 53% of the CPP assets.
Michel Leduc, the head of public affairs at the CPP Investment Board, disputes the $334 billion figure, stating that the agency cannot find any legal or actuarial basis to support it. Instead, the CPP Investment Board estimates that Alberta’s share would be closer to 16%.
Economist Trevor Tombe of the University of Calgary calculates that Alberta’s portion should range from 20% to 25%. Kayande accuses the government of misleading Albertans with unrealistic expectations of higher payouts and reduced contributions tied to an unattainable outcome. In his view, any future referendum lacks credibility due to the false premise on which it is based. He decries the referendum as an ill-informed decision driven by erroneous claims of $350 billion, which could potentially skyrocket to a trillion dollars by the time 2027 arrives.
When asked for comment on Kayande’s remarks, Smith’s office referred the issue to Finance Minister Nate Horner’s office, which has yet to respond. The consultation process is the next step in the government’s plan. A panel led by former Alberta finance minister Jim Dinning will engage with Albertans in the coming months and provide a report in the spring on whether residents are interested in voting on creating an autonomous pension plan.
To support their position, the government has created a survey on its website, highlighting the report’s numbers and asserting that an Alberta pension plan would be secure, yield cost savings, and potentially offer higher payouts. The survey asks Albertans to provide input on how to structure the plan, rather than whether pursuing the plan is a good choice.
Duane Bratt, a political scientist at Mount Royal University in Calgary, explains that the survey assumes that Alberta will leave the CPP and transition to an Alberta pension plan, with 53% of CPP assets. Bratt suggests that the survey and consultations aim to counter public opinion surveys that indicate Albertans are opposed to leaving the CPP. He argues that the government’s objective is to change public sentiment, even if the venture fails. Bratt suggests that a failed Alberta pension plan would align with Premier Smith’s overarching political narrative, portraying a federal government that exploits Alberta’s wealth while imposing restrictions on the province’s oil and gas industry. Any disputes over the $334 billion claim would strengthen Smith’s argument that Alberta is being prevented from leaving the CPP by the rest of the country.
The NDP has called for a public pension debate in Alberta, creating a contentious issue that remains unresolved and uncertain.
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