Alberta Premier Danielle Smith says it’s up to the people of the province to decide if they want to ditch the Canadian Pension Plan (CPP) for an Alberta alternative after a report said the province contributes a significant amount to the federal plan.
“We’ve got a higher workforce participation. We’ve got those workers paying more in and employers paying more in on their behalf. And that’s the reason why we consistently overcontribute,” she said during a radio call-in show on Sept. 30.
“My question is, if we don’t do something about this now, what’s it going to be in 2050?”
Ms. Smith made the comments after callers questioned her about a recent third-party report indicating Albertans would be entitled to over half of CPP assets if the province decided to leave the national retirement savings program.
The report was put together by Lifeworks and notes that Alberta would get about $334 billion, or 53 percent, of the CPP.
“The law says that the only way you can set up an additional pension plan is if you offer the exact same or better benefits than what happens in the CPP so there’s no way to implement it without having those guarantees,” Ms. Smith said during the show.
“It’s up to Albertans to decide. We wanted to let the country know just how much Alberta is carrying the weight on not just this program, but virtually every program. And we want to put it to the people to decide if they want lower premiums.”
She said her government would follow the lead of the people.
“It may well be that Albertans are happy with this scenario, where we constantly overpay,” she said. “They have the ultimate choice. I think people know that I’m persuaded by the numbers, but it’s not up to me. It’s going to be up to Albertans.”
Alberta Plan Could Hurt Business, Workers, Chamber Says
The Calgary Chamber of Commerce said a provincial plan could end up hurting businesses and workers in the province.“The Alberta Pension Plan proposal is complex and has far-reaching implications for businesses and investors—in Alberta and across Canada,” Deborah Yedlin, Calgary Chamber of Commerce president and CEO, said in a news release.
“Dismantling existing systems and altering our pension system could compromise labour mobility from other provinces, the benefits of risk pooling that comes with a larger pension fund, and investor confidence. We urge the government to strongly consider—and prioritize—stability across all public policy decisions.”
Questions
One caller asked what would happen to people who moved out of the province but had paid in the Alberta plan.“I guess the way I look at it is that they managed to figure this out in other types of pension plans,” Ms. Smith responded.
“This is what actuaries do, is that we have sophisticated people who know how to make sure that the funding follows the client, that people have a seamless amount of pay when they’re entitled to receive it.”
Cost of Private Plan
The report estimated it would cost between $100 million and $1 billion to set up an Alberta pension plan. Creating an investment arm of the plan would call for another $75 million to $1.2 billion.Provinces are required to give a three-year notice if they intend to quit the CPP.
Alberta would be the first province to quit CPP; Quebec never joined when it was set up in 1965.
The Canadian Press contributed to this report.
