Chief Actuary to Create Estimate on Alberta Leaving CPP, Freeland Says After Meeting With Provinces

Deputy Prime Minister and Minister of Finance Chrystia Freeland responds to a question during a news conference in Ottawa on Oct. 24, 2023. The Canadian Press/Adrian Wyld

Following a meeting with provincial and territorial finance ministers on the potential for Alberta to leave the Canada Pension Plan (CPP), Finance Minister Chrystia Freeland said she will ask the federal government’s chief actuary to put together an estimate on the cost of asset transfers in such a scenario.

“I told ministers today that I would ask the chief actuary to provide an estimate of the asset transfers, based on a reasonable interpretation of the provisions in the CPP legislation. Our officials will work together to define the precise taskings for this work,” Ms. Freeland told reporters on Nov. 3.

Ms. Freeland’s comments come as Alberta has been mulling the creation of its own retirement plan and pulling out of the CPP. The federal act that created the CPP in the 1960s allows for provinces to leave by giving three years’ written notice.

A report commissioned by the Alberta government found that if the province were to exit the program, it would be entitled to more than half the assets in the CPP by 2027. Ms. Smith has said it should be up to Albertans to decide if they want to leave the plan, with a possible referendum in 2025.

Ms. Freeland told reporters that it was important for her to meet with the provinces’ and territories’ finance ministers because Alberta’s decision on whether to leave the CPP “implicates every single Canadian.” She said if the province were to withdraw, then Ottawa would need to negotiate “complex, time-consuming” portability agreements “with the CPPP and with Quebec’s Pension Plan.”

“Furthermore, if Alberta were to choose to leave, the government of Alberta would also need to negotiate international social security agreements to ensure similar treatment of contributors who spend part of their careers abroad.”

The finance minister said all of this would be taking place at a time of global geopolitical and economic uncertainty. “I truly believe ... that adding to that uncertainty right now is not something that would help Albertans or any Canadians,” she added.

Both Prime Minister Justin Trudeau and Conservative Leader Pierre Poilievre have encouraged Alberta to stay in the CPP, but for different reasons.

“I am deeply concerned that your government has proposed to withdraw Albertans from the Canadian Pension Plan,” Mr. Trudeau’s said in a letter dated Oct. 18.  “We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians.”

Mr. Poilievre blamed Alberta’s desire to leave the CPP on Ottawa’s “anti-constitutional” anti-energy policies and “painful carbon taxes.” He encouraged the province not to leave the pension program, saying “I will protect and secure the CPP for Albertans and all Canadians by treating every province fairly and freeing Alberta to develop its resources to secure our future.”