In what’s shaping up to be a contentious national debate, Ontario Finance Minister Peter Bethlenfalvy is pushing for an “urgent” meeting with the federal Liberal government to discuss Alberta’s proposed withdrawal from the national pension plan.
The push follows Alberta’s proposal to withdraw from the Canada Pension Plan (CPP) and create its own separate Alberta pension.
“I am writing to request that you convene an urgent meeting of Canada’s federal, provincial and territorial (FPT) finance ministers to discuss Alberta’s proposed withdrawal from the Canada Pension Plan,” wrote Bethlenfalvy in his letter to Deputy Prime Minister Chrystia Freeland.
Bethlenfalvy raised concerns about the effect that Alberta’s proposed withdrawal would have on the country at large. He explained that the CPP belongs to all workers and beneficiaries across Canada.
“The CPP’s greatest strength is its pan-Canadian approach that provides stability for workers and their families, so Canadians can be sure they have a reliable retirement plan, no matter where they live, work or choose to retire,” he wrote.
“We believe this proposal could cause serious harm over the long term to working people and retirees in Ontario and across Canada.”
While no province has ever left the CPP, Quebec chose not to join when the program was launched in 1966.
Prior to Bethlenfalvy’s letter, Prime Minister Justin Trudeau wrote to Alberta Premier Danielle Smith, saying he believed Alberta leaving the CPP would adversely affect the pensions of millions in Alberta and across Canada.
“The harm it would cause is undeniable,” wrote Trudeau.
Responding to such criticisms, Smith fired back.
“It is disingenuous and inappropriate for you to stoke fear in the hearts and minds of Canadian retirees on this issue,” she wrote.
Much of Smith’s response referred to the LifeWorks report written by pension actuarial experts, which analyzed the costs, benefits, risks, and considerations of an Alberta pension plan.
The report suggested that Alberta would be entitled to a whopping $334 billion by 2027, more than half of the CPP’s current assets pegged at $575 billion. This figure is significantly higher than Alberta’s proportionate population within the CPP, which stands at approximately 15%.
Bethenfalvy addressed the report in his letter to Freeland.
“We would also welcome a rigorous analysis of the assumption that Alberta’s proposal is based on,” he said.
Shortly after Bethenfalvy’s letter was released, Freeland indicated her intent to arrange meetings with provincial and territorial finance ministers to discuss Alberta’s plan to withdraw from the CPP.
Speaking in Calgary, Freeland said any province has the right to leave the program, but that it’s important the decision is “based on facts and…clearly and well-informed.”
In his own letter to Freeland, Alberta Finance Minister Nate Horner indicated Alberta would like to host Freeland and the province’s provincial and territorial counterparts in Calgary at the next finance ministers meeting.
“Alberta welcomes all good-faith, rigorous analysis of the report produced by LifeWorks,” he said.
Horner said he’d like the meeting to discuss equalization reform, the federal fiscal stabilization formula, and the federal carbon tax, which he said “continues to significantly increase the cost of living for every Canadian.”