Benefits & Pensions
Trudeau chides Smith for pension exit debate, promises to defend stability of CPP
By Dean Bennett
Prime Minister Justin Trudeau entered the Alberta pension-exit debate Wednesday, saying the federal government will fight any threat to the stability of the Canada Pension Plan.
In an open letter to Alberta Premier Danielle Smith, Trudeau also took her to task for launching the debate in the first place.
“We are living in a time of unprecedented challenges,” Trudeau tells Smith in the letter.
“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.”
Smith’s office did not immediately return a request for comment.
Trudeau said in the letter that the CPP is recognized the world over as a success story of co-operation, and said his government aims to keep it that way.
“The world is changing fast, and the cost of living is putting a lot of pressure on hardworking people,” he wrote.
“Canadians need our support, and they need to have continued faith that their financial future is secure. With all the uncertainty they face, Canadians should not have to worry whether or not the Canada Pension Plan will continue to be there for them in their retirement.
“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 benefited generations.”
Trudeau stressed his government will not be silent in the debate.
“I have instructed my cabinet and officials to take all necessary steps to ensure Albertans — and Canadians — are fully aware of the risks of your plan, and to do everything possible to ensure CPP remains intact.
“We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians.”
Trudeau’s comments come a day after the Canada Pension Plan’s investment board asserted Alberta’s messaging and public opinion surveys on leaving the CPP are biased, unfair and manipulative.
Alberta’s $7.5-million advertising campaign and its online public survey focus on the findings of a third-party report commissioned by the province. That report, by pension analyst LifeWorks, calculates Alberta is owed more than half the $575 billion in the CPP fund, and states an Alberta plan could offer lower contributions and higher payouts to retirees.
In an open letter Tuesday, the Canada Pension Plan board said the province is not giving its citizens the true picture by failing to spell out the potential risks and drawbacks of one province going it alone on pensions.
Smith’s government agrees leaving the fund would hike contribution rates in other provinces but says it’s not to an onerous degree.
The premier has tasked former Alberta treasurer Jim Dinning with gauging public opinion on whether there is an appetite in the province for leaving the CPP. If so, a referendum would be called to put the question to Albertans.
The pension exit issue has been bubbling for years in Alberta after the United Conservative government struck a panel in 2019 that ultimately recommended the issue be investigated.
Smith has said that based on the LifeWorks numbers she would be remiss if she didn’t at least put the issue up for discussion.
Critics, including the Opposition NDP, note public opinion surveys have consistently shown majority support for staying in the CPP.
Along with the online survey, Dinning’s panel is holding a number of telephone townhalls and has promised in-person sessions in December.
On Monday’s inaugural telephone town hall, callers sought more details on how the plan would work, including how it would be managed. Some questioned the LifeWorks numbers and one caller suggested the province seek a second opinion.
Dinning defended the LifeWorks report, saying, “The only actuarial study that’s been done is the one that the government has released.”
The CPP investment board estimates Alberta would be entitled to about 16 per cent of the CPP assets.
The CPP board also released Tuesday a third-party analysis of the Alberta consultations. That analysis, by Innovative Research Group, questioned how seriously Smith’s government was taking the consultations given that decisions appear to have already been made.
The report pointed out that last week Alberta Finance Minister Nate Horner publicly rejected using the Quebec pension fund investment model for the Albertan plan even though Smith had said previously that is up to Albertans to decide.
Horner’s office has declined repeated requests to clear up the confusion, leaving Horner on record saying the Quebec model is out while his spokesperson Savannah Johannsen is on record saying the Quebec model is in.
Opposition NDP finance critic Shannon Phillips says the entire affair should remind Albertans that Smith’s government would be challenged to “organize a two-car parade.”
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