Provincial leaders in Alberta have floated publicly the possibility of withdrawing assets of Alberta residents from the Canada Pension Plan by 2027 and released on Thursday the findings of a report commissioned by the provincial government analyzing and detailing the benefits and risks of such a move.
Consultancy Telus Health, formerly LifeWorks, calculated the potential share of CPPIB assets to which Alberta would be entitled, using the amount Alberta residents contribute, subtracting their benefits payments and taking into account the CPP’s expenses and investment returns. The C$575 billion pension plan, managed by the Canada Pension Plan Investment Board, provides retirement income and benefits to residents of all Canadian provinces except Quebec.
Commissioned by Alberta’s government, the report estimated that the province’s residents are entitled to C$334 billion, more than half of the CPP’s assets, backing provincial officials’ claims that Alberta contributes a disproportionately large amount to the CPP due do its significant oil and gas business. Former Alberta Premier Jason Kenney proposed a separate Alberta pension plan in 2020.
Alberta Premier Danielle Smith, herself elected in October 2022, led her provincial United Conservative Party to a May election victory in provincial elections and immediately began sparring with the national government and Prime Minister Justin Trudeau about climate change, referencing “soon-to-be-announced Ottawa policies” in her election night address. The report’s release is a significant political play following recent disagreements over plans to regulate the oil and gas industry.
Smith issued a strongly worded media statement in late August in anticipation of the October release of a draft proposal of the national government’s plans to cap greenhouse gas emissions.
“We would strongly suggest the federal government refrain from testing our government’s or Albertans’ resolve in this regard,” the release stated. “Under no scenario will the Government of Alberta permit the implementation of the proposed federal electricity regulations or contemplated oil and gas emissions cap.”
Any decision on an Alberta pension plan would have to be approved through a provincial referendum. A poll from earlier this year showed that only 21% of Alberta voters were in favor of the idea of withdrawing from the Canada Pension Plan. In the poll, the highest percentage of supporters came from the 18 to 34 age group, with 29% support. The 55-and-older age group largely opposed the idea, with 65% of those polled against it.
The province launched a website for the plan, indicating that if a referendum were held, it could be sometime in 2025. The site lists steps that must occur before an Alberta pension plan could be established:
- Engagement and consultation with Albertans to determine whether there is sufficient interest in holding a referendum on establishing an APP;
- Give written notice of Alberta’s intent to withdraw from the CPP;
- Draft legislation to set up the APP;
- Develop agreements to coordinate benefits with the CPP, the Quebec Pension Plan and international social security agreements for Albertans working and living abroad.
Tags: Alberta, Alberta Pension Plan, Canada, Canada Pension Plan, CPP, CPPIB, Danielle Smith, Jason Kennedy