Alberta Finance Minister Nate Horner speaks to media at a news conference in Calgary, on June 29.Jeff McIntosh/The Canadian Press
The federal Finance Minister sharply rejected Alberta’s assertion that it is entitled to more than half of the assets in the Canada Pension Plan should it decide to split from the national fund, warning the Premier that she is putting her constituents at financial risk.
Chrystia Freeland, in a letter Wednesday, told Danielle Smith that her claim that Albertans would pay less in pension contributions under a homegrown plan is “ultimately based upon a flawed analysis” of how much money the province would receive if it left the CPP.
Meanwhile, Nate Horner, Alberta’s Finance Minister, in his own letter Wednesday to Ms. Freeland, acknowledged that his province’s calculation is imperfect. Alberta’s assumptions are based on public information, he said, and Ottawa has access to data that could affect the math.
Ms. Freeland is scheduled to meet with provincial and territorial finance ministers on Friday to discuss Alberta’s proposal to withdraw from the CPP.
The latest push for an Alberta Pension Plan (APP), which started as part of the United Conservative Party’s multi-pronged campaign to distance the province from Ottawa, is threatening to morph into a national dispute, with other governments lining up against Ms. Smith. Ontario last week called for the special meeting of finance ministers, while arguing Alberta’s plan could cause “serious harm” for Canadian retirees.
Ms. Freeland, responding to Ms. Smith’s Oct. 18 letter to Prime Minister Justin Trudeau, said the CPP is the “foundation of a secure and dignified” retirement for Canadians, including those in Alberta.
“While Alberta has a right to withdraw should it so choose, Albertans deserve to know that doing so would be an historic, costly, and irreversible mistake,” she wrote.
Alberta’s pitch to ditch the CPP relies on a report the government commissioned from LifeWorks, now owned by Telus Health. It determined Alberta would be entitled to $334-billion of CPP’s $575-billion assets should the province exercise its right to set up its own plan as of 2027.
Alberta’s interpretation of the formula, however, is widely disputed. Ms. Freeland pointed to University of Calgary economist Trevor Tombe’s analysis, which, using LifeWorks’s math, said Alberta, Ontario and British Columbia would be entitled to 128 per cent of CPP’s assets.
Smith says Alberta’s CPP exit campaign to continue despite questions over key number
Mr. Horner, in his letter, requested Ms. Freeland provide Alberta with the federal government’s calculation of what the province would receive, as well as the underlying data. CPP’s valuation report, prepared by the Office of the Chief Actuary of Canada, contains information and data needed to “fine-tune” LifeWorks’s work, he said.
The legislation governing the CPP does not appear to oblige the federal government to provide a departing province with an estimate or to negotiate.
Ms. Freeland’s spokesperson, Katherine Cuplinskas, did not address whether the Finance Minister planned to provide Alberta with Ottawa’s pension calculations. A spokesperson for CPP Investments, Frank Switzer, directed questions about the exiting process to the federal government.
While Ms. Smith favours establishing an APP, she has confirmed her government will not exit the CPP without first holding a provincial referendum. She has also said such a vote will not take place unless Albertans are provided with a concrete understanding of how much money the province would receive from CPP to establish its own retirement pool.
Albertans, during the tele-townhalls, have expressed disbelief the province would walk away with 53 per cent of CPP’s assets. As doubts mount, Ms. Smith and her government have indicated the proposed referendum may not happen, which would effectively end the UCP’s push for the APP.
Alberta has earmarked $9.3-million for an advertising campaign promoting an APP and consultation process gauging interest in the plan. The government, while acknowledging that the LifeWorks number likely needs to be tweaked, has based the ad blitz and town halls on the $334-billion assumption.
Ms. Smith spent much of September and October trumpeting the LifeWorks report, arguing it is further evidence the rest of Canada takes advantage of Alberta’s prosperity. But despite rolling out the report, ad campaign, consultation process and trading a slew of letters with federal officials, the government did not mention the APP as a priority in its Throne Speech on Monday.