Trudeau opposes Alberta’s push to split from Canada Pension Plan

The chair of the engagement panel, Jim Dinning, expressed gratitude for the comments shared by Duane from Camrose about the potential Alberta Pension Plan during a telephone town hall. The process of gathering feedback on the proposed pension plan has been limited to date, with a questionnaire and phone-in forums being the main methods of engagement.

In the midst of this, the largest stakeholder, Prime Minister Justin Trudeau, publicly addressed the issue in an open letter to Premier Danielle Smith. The letter forms part of a wider intergovernmental communication strategy, combining diplomacy and public relations. Premier Smith is no stranger to this method, having used it herself on several occasions.

Prime Minister Trudeau’s letter, which objects to the division of the Canada Pension Plan, follows a month after Premier Smith initiated her campaign for Albertans to pay lower contributions, receive higher benefits, and take over 53% of the national retirement fund’s assets. The Prime Minister cautioned against the risks of such a plan, stating that it would expose millions of Canadians to increased volatility and deny them the stability offered by the current plan.

Premier Smith responded promptly and directly to Trudeau, accusing him of trying to create fear among Canadian retirees. She highlighted the absence of any figures or counterarguments in Trudeau’s letter. Smith referenced a provincially commissioned report from Alberta which suggested the province is entitled to $334 billion of CPP assets and that the Alberta Pension Plan’s annual contribution rates could be $1,425 lower for Albertans.

Smith challenged Trudeau to provide an alternative calculation, asking, “Like, what does he think the actuaries would say?” There has been no analysis provided by either Ottawa or the Canadian Pension Plan Investment Board. The board’s executive, Michel Leduc, suggested last month that Alberta’s likely asset claim is around or below 20 per cent, without providing any calculations to support this assertion.

The pension board issued a critique of Smith’s engagement process this week, which consists of upbeat ads, a website promoting the virtues of the plan, a survey without room for criticism, and no in-person consultations.

The debate surrounding the proposed Alberta Pension Plan is fraught with uncertainty. Some, like economist Trevor Tombe, have conducted their own financial appraisals, suggesting that the report commissioned by the province may overestimate Alberta’s fair claim by around 50%.

Employment Minister Randy Boissonnault hinted that a federal analysis might be on the horizon. He carefully avoided specifying who would be conducting this analysis but stated that “The numbers are going to be crunched very carefully over the next year.”

This pension dispute marks a rare instance of Trudeau publicly opposing an Alberta measure. Despite the numerous provocations, legal threats, and Sovereignty Acts that have emanated from Alberta, Trudeau has not previously taken a public stance against them.

The timing of Trudeau’s intervention suggests that politics may be a factor. The Prime Minister’s opposition to the proposed Alberta Pension Plan aligns with popular public sentiment in Alberta, presenting an opportunity for the Trudeau Liberals to score points against Conservative Leader Pierre Poilievre.

Finally, the potential impact of Alberta’s withdrawal from the CPP is distinct from other plans to distance the province from federal influence. If Alberta were to remove a significant portion of the CPP fund and reduce the contribution pool, it could weaken the retirement program for all remaining participants. The national fund’s investment power could be diminished, and the departure of a younger, more prosperous group of working Albertans could result in higher costs for other Canadians.

The province is gradually moving towards a 2025 referendum and a significant shift in the Alberta-Canada relationship, with only one side of the relationship currently stating its case. However, Trudeau’s intervention has changed this dynamic, forcing Smith to contend with both a popular CPP and an unpopular Prime Minister.