Canada Warns of Economic Uncertainty if Alberta Exits National Pension Plan, According to Reuters

OTTAWA (Reuters) – Canada’s economic landscape may experience increased uncertainty if Alberta proceeds with its intention to withdraw from the Canada Pension Plan (CPP), stated federal Finance Minister Chrystia Freeland on Friday.

Freeland’s comments followed a conference call with regional finance ministers to address this matter. Alberta’s Finance Minister Nate Horner reassured that the province would not leave Canadians without a reliable pension and its accompanying benefits.

“For the past several weeks, Alberta has been openly discussing the possibility of creating an Alberta Pension Plan aimed at supporting our seniors and workers,” he explained. “This will only move forward if Albertans choose to pursue it in a referendum.”

Alberta, known for its conservative political stance, has had a strained relationship with Prime Minister Justin Trudeau’s Liberal government since he took office in 2015. The government of Alberta Premier Danielle Smith’s United Conservative Party (UCP) has initiated a consultation process to explore the province’s potential exit from the CPP, which safeguards C$575 billion on behalf of over 21 million contributors and beneficiaries nationwide.

Smith has indicated her intention to follow up the consultation with a referendum in 2025. Recently, the Alberta government announced that proposed legislation would ensure contribution rates remain the same or lower than those of the CPP, along with benefits that are equivalent or better.

The Alberta Pension Protection Act would mandate that Albertans vote in favor of any new pension plan in a public referendum prior to the provincial government’s attempt to withdraw assets.

Freeland, a significant member of Trudeau’s administration, has requested the chief actuary to provide an analysis of the asset transfer that would be necessary if Alberta left the CPP, based on a “reasonable interpretation” of the laws governing the pension program. However, when asked about the feasibility of Alberta claiming 53% of CPP assets by 2027, as per a study commissioned by the provincial government, Freeland expressed skepticism.

She also warned that negotiations would be essential to ensure that Canadians can live and work anywhere in the country without putting their retirement benefits at risk.

“Alberta would need to negotiate intricate and time-consuming portability agreements with the CPP and the Quebec Pension Plan,” she remarked, noting that Quebec already operates its own pension system.

Both Trudeau and opposition Conservative Party leader Pierre Poilievre have voiced their opposition to Alberta’s proposal.