Alberta Premier Danielle Smith speaks to business leaders at the Global Business Forum in Banff, Alta., on Sept. 22, 2023.Jeff McIntosh/The Canadian Press
A report from Canada’s Chief Actuary sides with experts who estimate that Alberta would be owed a much smaller share of the Canada Pension Plan’s assets than the province has proposed if it chooses to pull out of the national retirement program and form a provincial alternative.
The opinion released Friday was commissioned last November by the federal finance minister, then Chrystia Freeland, after Alberta suggested that it would be entitled to withdraw more than half of the CPP’s assets – about $334-billion at the time – to set up an Alberta Pension Plan.
Ottawa, a number of provinces and some pension experts disputed the method used to calculate Alberta’s claim, which was contained in a separate report that the province commissioned from LifeWorks, a company that has since been acquired by Telus Health. The Chief Actuary had the task of finding “a reasonable interpretation of the provisions” in the law that governs the CPP.
Chief Actuary Assia Billig consulted a panel of independent actuaries and considered positions outlined in academic papers published by Trevor Tombe, an economics professor at the University of Calgary. She also considered the LifeWorks report.
Her opinion stops short of attaching a dollar value to any province’s share of CPP. But she agrees with interpretations put forward by Dr. Tombe, who has suggested Alberta should get between one fifth and one quarter of CPP’s assets if it withdraws, and similar findings from the advisory panel.
“The Chief Actuary’s position, although independently developed, is consistent with the findings of the [panel] and the method presented in Dr. Tombe’s paper,” the report says. It also emphasizes that the final call about how much to pay out to a province that chooses to withdraw from CPP “resides with the Minister of Finance.”
Dr. Tombe’s estimated range would suggest Alberta could withdraw from $130-billion to $160-billion, based on the CPP’s current $647-billion in assets – far less than Alberta Premier Danielle Smith had suggested when she pitched an Alberta Pension Plan to voters last year.
Ms. Smith said at a Thursday news conference that she was disappointed that the Chief Actuary’s report “doesn’t contain a number,” and that Alberta needs a firm figure from Ottawa before it can decide whether to hold a referendum on withdrawing from CPP.
Federal Finance department spokesperson Benoit Mayrand said Thursday that Ottawa will meet with provinces and territories “over the coming weeks regarding the report and possible next steps.”
All provinces except for Quebec are part of the CPP, and each has the legal right to withdraw from the plan to set up their own system, but the decades-old legislation that sets the terms has drawn varying views on how that would work.
“Now that we have the report, we’re going to assess it very carefully,” said Michel Leduc, global head of public affairs and communications for the Canada Pension Plan Investment Board, which manages the CPP’s assets.
With a report from Carrie Tait in Calgary