In a fiery letter of her own, Alberta Premier Danielle Smith clapped back at Ottawa over “disingenuous” claims made about its provincial pension plan.
“I am concerned you may seek to prevent Alberta from relying on the withdrawal provisions in the CPP Act,” she writes.
According to a letter penned by Prime Minister Justin Trudeau on October 17, leaving the Canada Pension Plan (CPP) would cause “undeniable” harm to Albertans and Canadians.
He called the CPP a “stable fixture […] of pension income for almost six decades,” and suggested “Alberta’s withdrawal would weaken the pensions of millions of seniors and hardworking people […] across the country.”
“Canadians have trust in the CPP, are proud of the CPP, and work hard, with the expectation that the CPP will be there to provide financial security when the time comes to retire,” said the prime minister.
“Protecting, and building upon, this model is something the federal government takes very seriously.”
Smith called out Trudeau twofold for exaggerating the impacts of Alberta leaving the CPP and for attempting to make a political point on provincial jurisdiction.
“There’ll be some impact to the rest of Canada if Alberta chooses to go its own way with the assets we believe we’re entitled to, but it’s a matter of $175 per person,” she penned.
“Due to Alberta’s younger population, higher pensionable earnings and higher employment rates, contributions by Albertans to the Canada Pension Plan have historically exceeded the benefits paid to Alberta,” said the pension report, Alberta Pension Plan Analysis Of Costs, Benefits, Risks And Considerations.
On September 21, Smith defended her ‘made-in-Alberta pension plan,’ claiming it “could put more money in the pockets of hard-working families and business owners and improve retirement security for seniors.”
By receiving a $334 billion asset transfer from the CPP in three year's time, Albertans would receive reimbursement for their past contributions minus how much they received in benefits since its inception in 1966.
The province says it would provide a “significant financial backstop” to cover benefit payments well into the future.
According to the CPP Investment Board, the CPP has $575 billion under management, amounting to 58% of its assets should the Board agree to that amount.
“I don’t buy the math,” Employment Minister Randy Boissonnault told reporters Wednesday. “I think there are some problems with the math that got us to this point.”
He called Alberta’s report “flawed” and warned the feds would crunch their numbers “very carefully over the next year, quite frankly, if Alberta pulls out of the Canada Pension Plan.”
According to Blacklock’s Reporter, Parliament introduced the CPP in 1966 for all provinces but Québec. “We had no choice but to agree to Québec’s staying out,” then-welfare minister Judy LaMarsh said at the time.
“There is just so much going on, so much volatility,” said Labour Minister Seamus O’Regan. “We don’t need more volatility with the Canada Pension Plan. It is rock solid.”
Smith urged her federal counterparts to ultimately “let Albertans decide” on their pensions as is their right per Section 94 of the Constitution.
“We believe that this is a decision that should be made by Albertans,” said the premier. “It’s why we’re putting forward pension legislation in the fall.”
“[It] guarantees that benefits will be the same or higher contributions will be the same or lower. All the assets transferred would be for the purpose of supporting our seniors and the pension plan,” she added.
The UCP held its first of five telephone town halls earlier this week, allowing Albertans to learn more about the proposed plan to leave the CPP and to give their input.
Though some participants supported the adoption of a new provincial pension plan, others criticized the consultations as presupposing Alberta will leave the CPP.
Smith claimed Ottawa is “trying to […] make some kind of political point” after being on the receiving end of a Supreme Court ruling on Bill C-69.
“ […] and quite frankly, I just don’t think that that’s helpful,” she said.
“I have instructed my Cabinet and officials to take all necessary steps to ensure Albertans — and Canadians — are fully aware of the risks of your plan, and to do everything possible to ensure CPP remains intact,” said Trudeau.
Several federal ministers concurred with the prime minister,
The Liberal leader added, “We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians.”
Smith warned of “serious legal and political consequences” should Ottawa undermine her province’s constitutional authority over pensions.