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Alberta re-examining an exit from the CPP

Posted on August 3, 2023 by Taber Times

By Trevor Busch
Taber Times

Does Alberta need an alternative to the Canada Pension Plan (CPP)? 

Premier Danielle Smith, among others in the UCP, think that it does.

Smith’s recent mandate letter to Finance Minister Nate Horner directed him to re-examine the idea, which has been strongly denounced by Rachel Notley and the NDP, while also releasing the government’s Alberta Pension Plan (APP) report on the advantages and disadvantages of exiting the CPP.

Proponents of an APP argue the province’s younger demographics could support a plan that offers similar benefits for less than the CPP.

Taber-Warner MLA Grant Hunter, on the other hand, wants to examine the numbers before making any endorsements for a made-in-Alberta pension plan.

“I’m all about the numbers, whatever will make Alberta a better place – I am all about that,” said Hunter. “So when we get the final report, then let’s read through it. Let’s read through those, and let’s figure out as Albertans, what’s the right thing to do? I mean, if it makes sense, if it’s going to save us a whole bunch of money, if it’s going to save Albertans and our pensioners a whole bunch of money, or they’re going to be able to make more money, then why wouldn’t we look at that?”

While Quebec has its own pension plan (the province chose to go its own way when the CPP was created in 1966), no province has ever exited the CPP so Alberta would be entering uncharted waters. 

“I don’t hold dogmatically to something just because I want to look at the numbers,” said Hunter. “I’m all about outcomes. And if the outcome looks like it’s going to be better for Albertans, for us to have a provincial pension fund like Quebec has, then I’m interested in looking – I don’t think anybody would not look at it. I’m not sure exactly why (there) seems to be so much buzz about it. But let’s look at the numbers first.” 

Alberta can’t simply wash its hands of the CPP and walk away. Three key conditions would have to be met, including giving three years’ notice and assuming accrued obligations and liabilities, enacting our own legislation within a year of that notice, and getting a stamp of approval from the federal government that recognizes the provincial plan as “being comparable to the CPP” – negotiations that constitutional experts and federal civil servants suggest would be extremely contentious.

That being said, arguments the provinces or federal government could outright block Alberta’s exit from the CPP are largely false, but negotiations over the details of an exit and the structure of an APP would likely be bitter and protracted.

Horner has yet to specify when the APP report is expected to be released publicly. For Hunter, if it indicates only marginal benefits for Alberta in creating an APP, he would be reluctant to endorse the idea. 

“Before we bet, the numbers say it’s going be marginally better. But is it really worth it? And I think that we just say no, we’re not going do it. Very simple in my mind.”

One silver lining for Albertans less than enthusiastic about the idea of leaving the CPP is Smith’s mandate letter confirmed any decision won’t be made around the cabinet table but by putting the question to voters through a province-wide referendum. 

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