Minister of Finance Chrystia Freeland holds a press conference in Ottawa on Nov. 3. Freeland held a virtual meeting today with provincial finance ministers, in which she says they discussed the consequences of Alberta going ahead with its proposal to quit the Canada Pension Plan.Sean Kilpatrick/The Canadian Press
Ottawa will provide Alberta with an estimate of how much money it would receive from the Canada Pension Plan if the province were to exit the national retirement system, federal Finance Minister Chrystia Freeland said after meeting with her counterparts from across the country on Friday.
Ms. Freeland told reporters that she will ask the Office of the Chief Actuary to calculate an asset transfer “based on a reasonable interpretation of the provisions” in the CPP legislation. Alberta, relying on a report it commissioned, contends it is entitled to more than half of the CPP’s $575-billion in assets. Ms. Freeland said she does not think Alberta’s reading of the legislation is realistic.
Ms. Freeland convened the virtual meeting of the country’s finance ministers at the request of Ontario, to discuss Alberta’s proposed withdrawal from the CPP. Ontario’s government had expressed concern about the health of the national pension system after Alberta’s report, released in September, detailed the province’s vision for creating its own provincial pension plan with a share of the CPP’s assets.
Alberta had asked Ms. Freeland to provide Ottawa’s calculation of the province’s share of the CPP.
The federal Finance Minister said she told Alberta it would have to negotiate portability agreements with the CPP and Quebec’s pension plan before it could establish its own system. The province would also have to strike international deals to protect Albertans who spend parts of their careers abroad. She noted Canada has agreements with 60 countries. Quebec, which did not join the CPP at the plan’s inception, has deals with 39.
“This would be a complex and multiyear process,” Ms. Freeland said. “It would be taking place at a time of real uncertainty. Geopolitical uncertainty, global economic uncertainty.”
Negotiating such deals under these conditions, she said, would not be advantageous.
“Adding to that uncertainty right now is not something that would help Albertans or any Canadians.”
The meeting was partly overshadowed by the federal government’s late-October announcement that it would exempt heating oil from the federal carbon price, but not other heating fuels, such as natural gas. The exemption almost exclusively benefits residents of Atlantic Canada, where oil use is common.
Ontario Finance Minister Peter Bethlenfalvy said in a statement after the meeting that he appreciated the discussion about the CPP, but that he had also used the gathering to call on the federal government to scrap the carbon price on natural gas for home heating.
“In a period of economic uncertainty, no Ontarian – or Canadian – should have to worry about the security of their retirement savings,” he said. “Unity is a strength of the CPP, and it is a strength of our country.”
The federal government has said it will not provide further carbon price exemptions, and Ms. Freeland reaffirmed this on Friday.
Nate Horner, Alberta’s Finance Minister, said in a statement that he had also raised “the urgency” of the carbon price concerns during the call with Ms. Freeland.
On the CPP, Mr. Horner said his government is “encouraged” that Ottawa will provide an analysis of the asset transfer value to which Alberta would be entitled.
Alberta’s governing United Conservative Party has said it will not leave the CPP without first having a provincial referendum on the idea. Premier Danielle Smith, facing doubts from residents about Alberta’s claim to 53 per cent of the CPP’s assets, has since said the referendum will not proceed unless Ottawa or a court provides a concrete accounting of how much the province would receive if it established a parallel system.
Ms. Freeland’s pledge to provide an estimate could shield the federal Liberals from accusations that they are preventing Alberta from proceeding with a vote.
Donna Harpauer, Saskatchewan’s Finance Minister, said in a statement that she is disappointed Ms. Freeland is giving the pension debate so much attention, after Ottawa created what she called a carbon price “crisis.”
“I expressed my frustration with the federal government’s attempt to distract Canadians by inflating the false sense of urgency of this topic, which could take a decade or more to conclude,” Ms. Harpauer said.
She noted that Alberta’s Mr. Horner had provided insight into timing.
“The minister from Alberta reiterated Alberta’s plan going forward, which will also take a number of years to reach the referendum stage before they officially signal to the federal government that Alberta intends to leave the CPP,” she said.
Nova Scotia Finance Minister Allan MacMaster said in an interview that every minister had a chance to speak to the pension issue, and that there was a cordial discussion.
“There was no hostility towards Alberta at all in the meeting that I could see,” he said. “I think the general tone of the meeting was in support of Alberta, so that they have good information to go on.”
Mr. MacMaster said the CPP warrants attention, but he added that it would take years for Alberta to leave if it chose to do so.
He said that while there wasn’t a lot of debate about the carbon price issue on Friday, he expects it to be a topic of discussion at next month’s meeting of territorial and provincial finance ministers, a gathering he chairs.
“I can tell you, based on my conversation with ministers across the country, that it is one of the key issues that will be put on the agenda for that meeting.”