Federal Finance Minister Chrystia Freeland says if Alberta were to quit the Canada Pension Plan it would require a “complex and multi-year process” of negotiating international social security agreements to deal with contributors who work abroad.
Freeland said Friday (Nov. 3) that would be among the steps the Alberta and federal governments would have to take if the province were to withdraw from the federal retirement plan and set up its own.
Her remarks followed a virtual meeting with provincial finance ministers, in which she says they discussed the consequences of Alberta going it alone.
“Of course Alberta has the right to withdraw,” Freeland told reporters.
“But Alberta’s choice about the (Canada Pension Plan) also implicates every single Canadian.”
READ MORE: Alberta, Ottawa demand accountability ahead of meeting on Alberta CPP-exit proposal
Freeland, who called herself a “proud daughter of Alberta,” said she is hearing from Albertans concerned about the idea.
She added she is asking the chief actuary to “provide an estimate of the asset transfer,” based on a “reasonable interpretation of the provisions in the (Canada Pension Plan) legislation.”
Following the meeting, Alberta’s Finance Minister Nate Horner said he was encouraged to hear Ottawa would be providing an actuarial analysis.
“We’ve been asking for this for several weeks,” he said in a statement.
“To be clear, Alberta is committed to making sure that any potential creation of an Alberta Pension Plan will not leave our fellow Canadians without a stable pension and its associated benefits.”
On the issue of negotiating international social security agreements, Freeland told reporters that if Alberta launched its own program it would need to “ensure similar treatment of contributors who spend part of their careers abroad.”
Quebec has negotiated its own such agreements with 39 countries, while Canada has done the same with 60.
“This would be a complex and multi-year process and it would be taking place at a time of real uncertainty,” Freeland said, both in terms of “geopolitical uncertainty” and “global economic uncertainty.”
The Alberta government argues its workers have contributed an oversized share to the national fund and would be in line for big savings and payouts if it were to leave the CPP.
Alberta Premier Danielle Smith had planned to hold a possible referendum on leaving the CPP in 2025, but now says she won’t go ahead with such a vote until governments or the courts deliver a hard number on how much Alberta would get if it leaves.
READ MORE: Alberta talks pulling out of Canada Pension, wants half if it goes
New Brunswick Premier Blaine Higgs said he understands why Smith is proposing to pull her province out of the Canada Pension Plan.
“I don’t feel Alberta is leaving Canada,” Higgs said outside the legislature in Fredericton. “I think that Canada, in many ways, has left Alberta.”
He said that as the premier of a Maritime province that receives federal equalization payments, it’s worth noting that Alberta has been a major contributor to those funds. And he questioned why federal policies are “shutting down (Alberta’s) resource revenues at a time when they’re trying to reconfigure their economy.”
Higgs did not elaborate, but said Alberta’s bid to leave the pension plan represents a “shot across the bow” and “a reality check.”
However, the New Brunswick premier said he did not agree with Smith’s approach.
“If Alberta came out of the CPP funding formula, it would be a major problem … for Canadians across the country. I don’t think that’s Alberta’s intention.”
Last month, federal Conservative Leader Pierre Poilievre encouraged Albertans to stay in the federal pension plan.
But he blamed Prime Minister Justin Trudeau for creating the conditions, through measures such as carbon pricing, that would push the province to consider other options.
Nova Scotia’s Finance Minister Allan MacMaster, who chairs the council of provincial and territorial finance ministers, told reporters that every province expressed how much they care about the Canada Pension Plan during the meeting.
He said he believes the pension plan is better with Alberta in it.
“We want them to stay, and there was real consensus on that today,” he said.
“I don’t want to cause concern for people. I want people to know that there’s a strong consensus around the country about the importance of the Canada Pension Plan and we all want to work together to keep it the way it is.”
Ontario Finance Minister Peter Bethlenfalvy called unity a strength of the CPP.
“In a period of economic uncertainty, no Ontarian — or Canadian — should have to worry about the security of their retirement savings. Unity is a strength of the CPP, and it is a strength of our country. But unity requires fairness.”
British Columbia Premier David Eby said during an unrelated news conference in Vancouver that the main concern for B.C. residents and Canadians as a whole is that the pension plan will be there for them.
“It’s secure, it’s funded, it allows you to retire anywhere in Canada, (as) many Albertans know who are living in British Columbia right now, and it works.”
— With files from Allison Jones in Toronto, Dirk Meissner in Victoria and Michael MacDonald and Keith Doucette in Halifax.
Stephanie Taylor and Nojoud Al Mallees, The Canadian Press
