Prime Minister Justin Trudeau says he is “deeply concerned” over Alberta Premier Danielle Smith’s proposed plans to withdraw the province from the Canada Pension Plan (CPP).
In an open letter to the premier Wednesday, Trudeau said he has instructed his cabinet and officials to do “everything possible” to ensure the CPP remains intact, warning that an Alberta exit would cause “undeniable” harm.
Smith in September launched work on a provincewide consultation on whether to quit the Canada Pension Plan and instead create an Alberta Pension Plan, while releasing a report that estimated the province deserves more than half of the CPP’s assets.
The third-party report says Alberta should get $334 billion, or 53 per cent of the CPP, if it leaves the program in 2027 following the required three-year notification period.
However, the plan has faced criticism, including from Alberta business groups, investors and political opponents who say it would create significant instability and uncertainty.
Trudeau said in his letter that Canadians should not have to worry whether the CPP will be there for them in their retirement.
“Alberta’s withdrawal would weaken the pensions of millions of seniors and hardworking people in Alberta and right across the country,” the letter said.
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“Withdrawing Albertans from the Canada Pension Plan would expose millions of Canadians to greater volatility and would deny them the certainty and stability that has benefitted generations.”
Trudeau addresses the growing cost of living putting strain on Canadians, saying they “need to have continued faith that their financial future is secure.”
“We are living in a time of unprecedented challenges. External forces and events – from geopolitical unrest to climate change, and more – are having a direct impact on people here at home. As leaders, we have a duty to protect Canadians from these headwinds – not to introduce even more uncertainty and instability,” the letter says.
The Canada Pension Plan Act allows for any province to create its own “comprehensive pension plan” in lieu of participation in the CPP, and provides a formula for calculating a transfer of net CPP assets to that province — something Smith pointed out in a letter responding to Trudeau.
“Alberta agreed to those provisions in good faith when the legislation was enacted, and in the event that Albertans decide to withdraw from the CPP, they expect the CPP Act and its withdrawal formula to be followed,” Smith wrote in the letter, which was posted to her social media channels.
“Any attempt to do so will be seen as (an) attack on the constitutional and legal rights of Alberta, and met with serious legal and political consequences.”
When Smith announced the plan in September, she said the goal was to help Albertans and to send a message to Ottawa to stop taking for granted the province’s contributions to the national purse.
“We want to have a better, constructive relationship with the rest of the country, and this begins the conversation,” Smith said in Calgary.
“Many of these federal programs are stacked against us, and this one, I think, shows how dramatically stacked against Albertans it is.”
Trudeau said in his recent letter that cabinet and officials will take “all necessary steps” to ensure Albertans and Canadians are “fully aware” of the risks of Smith’s plan.
“We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians,” he said.
Alberta NDP Leader Rachel Notley said in a statement Wednesday her opposition party has heard from thousands of people who are worried about Smith’s plan, which she said “will be bad for Canada’s future and the retirement security of all Canadians.”
Notley also accused Smith’s government of misleading Albertans by creating “a full-scale propaganda campaign using public money to lie to them about the benefits of leaving” the federal plan.
“Albertans’ pensions belong to them,” she said.
— with files from The Canadian Press.
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