Chrystia Freeland, left, Canada's Deputy Prime Minister and Minister of Finance and Nate Horner, right, Alberta Finance Minister, walk together as Freeland hosts the annual meeting of federal, provincial, and territorial finance ministers in Toronto on Dec. 15.Nathan Denette/The Canadian Press
Alberta and Ottawa say officials will meet next month to work on the terms of a Canadian Pension Plan study about what the province would be entitled to if it struck up its own pension regime, as other provinces continued to urge Alberta to stick with the nationwide program.
Earlier this month, Alberta announced that it was pausing its campaign to convince residents to abandon the CPP in favour of a purely provincial plan. Quebec is the only province with its own pension plan.
Alberta released a report in September that said the province would be entitled to $334-billion of the CPP’s $575-billion in assets, sparking criticism from other provinces.
Following an emergency meeting of finance ministers in November, Ottawa announced that it would ask the Office of the Chief Actuary to calculate an asset transfer. That work has not been completed.
Speaking after a finance ministers’ meeting in Toronto on Friday, where infrastructure funding and affordability concerns were also discussed, Finance Minister and Deputy Prime Minister Chrystia Freeland said the pension issue is top of mind for her colleagues across the country. She said the Chief Actuary has agreed to do this “really complicated job,” where assumptions with even small differences can lead to a very different outcomes.
Federal, provincial and territorial officials will meet in January to define the task, she said, but she wouldn’t say when Ottawa would produce a cost estimate for Alberta’s withdrawal.
“The federal government is very clear, that it is our view, that the CPP works. It provides dignity and security for all Canadians. It works for Albertans, too,” she said.
Alberta Finance Minister Nate Horner said seeking the opinion of the actuary should provide more clarity to the public, noting that the office “has access to far better data” than the numbers used in Alberta’s report.
He said he couldn’t speculate on what would happen if the figures are wildly different. “The important thing would be how the actuary came to that conclusion,” Mr. Horner told The Globe and Mail in an interview.
“I think it’s getting less complicated if we seek this clarity and understanding with the actuary having better data.”
Mr. Horner added that Alberta has not made any final decisions about the pension plan.
“We haven’t done anything other than release a report and have a conversation, and promise that it would need a referendum to be initiated or followed through in any way,” he said.
He said that affordability, along with opposition to federal carbon pricing, were key issues of Friday’s discussion. The pension issue shines a light on Alberta’s contributions to the federation as a whole, as well as economic growth and investment opportunities, he said. “We’re happy to continue to be the economic engine of Canada, but quit stepping on our heads while we try to do it,” he said.
Ontario Finance Minister Peter Bethlenfalvy, whose outreach to Ms. Freeland spurred a meeting with fellow finance ministers last month to discuss Alberta’s potential withdrawal from the CPP, told reporters he’ll continue pushing Alberta to stay in the plan. He added that other provinces “might have an issue” with Alberta’s math.
“I still believe that it’s important for people of Canada to have certainty and stability in their pensions at a time of a lot of instability around the world,” he said.
Quebec Finance Minister Eric Girard said the annual December discussions are helpful for ministers as they prepare for next year’s budget season. He said infrastructure and labour issues were key topics of discussion.
He said the discussions about Alberta and the CPP were relatively short and focused on the technical details of the actuarial study.
Quebec said there’s “strong concern” about the figures that were presented by Alberta in terms of how much of the fund it would be entitled to should it withdraw.
“That’s definitely a very important question,” he said.
December in-person meetings of Canada’s finance ministers are a long-standing tradition. Given that the CPP is jointly managed by both levels of government, it is pretty much always discussed when they get together. The meetings are also an opportunity for the two levels of government to co-ordinate fiscal policy, especially at a time when the Bank of Canada is trying to bring inflation back down to its target range through higher interest rates.
When setting credit ratings, international bond rating agencies look at the combined fiscal health of public finances at both the federal and provincial level.
Ms. Freeland frequently likes to frequently point out that Canada is among the few countries in the world with a triple A credit rating from at least two major agencies. (A third agency, Fitch, downgraded Canada from triple-A to double-A-plus in June, 2020.)