New Alberta bill guarantees referendum in provincial pension process

Finance minister Nate Horner described the new legislation as a safeguard for Albertans as the process moves forward.

“This legislation protects the interests of Albertans and provides them assurance that if they move forward with an Alberta Pension Plan, their pensions and their benefits will always be there for them,” Horner said.

“We promise we would keep it safe and make sure it grows to provide retirement security for generations.”

Horner argued the legislation goes further than federal requirements, which already require that a province can only withdraw from the CPP if the provincial plan provides at least the same level of benefits as the federal program.

Alberta’s new pension protection bill goes beyond those Canadian government rules by guaranteeing its provincial program would provide the same or better benefits to Albertans and seniors, government officials said.

Canada’s finance minister Chrystia Freeland told Premier Danielle Smith in a letter Wednesday that leaving the CPP could put retirements at risk across the province.

“While Alberta has a right to withdraw should it so choose, Albertans deserve to know that doing so would be a historic, costly and irreversible mistake,” Freeland wrote.

The Alberta government has been advertising the benefits that it says could come to Albertans with a transfer out of the CPP, but economists and the Canada Pension Plan Investment Board say the amount Alberta would get would be half of what is being advertised, at best.

Freeland says in the letter that some estimates note an analysis using the same formula would predict that Ontario, Alberta and British Columbia combined are entitled to 128 per cent of CPP assets — an outcome she calls “untenable” and “absurd.”

Freeland is meeting with Minister Horner and his counterparts from every province and territory Friday morning regarding the federal pension plan.

LEAVING CPP WOULD TAKE TIME

The Alberta government says it would be entitled to $334 billion – half of the CPP’s assets – by Jan. 1, 2027, citing a summer report by Lifeworks.

If the province left the federal program, it could cause a domino effect that would see Ontario and British Columbia leave the CPP, according to some expert observers.

Alberta leaving the CPP would not take place for at least several years, however.

Currently, every province with the exception of Quebec is a contributing member of the CPP, which has operated independently of any government since it was created in the 1960s. Provinces are able to leave but are required by law to give written warning to Ottawa three years in advance.

Alberta said it won’t start the process until its citizens give the go-ahead in a referendum, a vote that would take place about a year after the government decides to hold one.

When he was asked for his personal opinion on creating an Alberta pension plan, minister Horner said “it has a lot of promise for Alberta.”

– with files from The Canadian Press

by Eli Ridder

New Alberta bill guarantees referendum in provincial pension process

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