OTTAWA (Reuters) – Canadian Finance Minister Chrystia Freeland said on Tuesday she will seek to challenge oil-producing province of Alberta’s proposal to withdraw from the Canada Pension Plan (CPP) in a meeting with provincial and territorial counterparts on Friday.
“I would like to specifically speak to the flaws underlying Alberta’s proposed exit formula,” Freeland said in a letter to set up the meeting with regional finance ministers.
Any province has the right to quit but the value of assets to be transferred must be negotiated.
The CPP dwarfs all other pensions and acts for 21 million contributors and beneficiaries. The predominantly French-speaking province of Quebec has its own system.
Alberta Premier Danielle Smith, whose right-leaning government has clashed with Ottawa on several issues, said that transferring money out of the CPP into a new scheme would save the province billions.
Her government has launched a consultation process about a potential exit from the CPP, which serves all provinces except Quebec. Albertans will have until early 2024 to submit their views to a panel, which will then report back to the government.
Alberta says it could take more than half the fund’s assets, an assessment the CPP has disputed.
Freeland said if Alberta’s formula was used to calculate other provinces claims, the cumulative entitlement would be much higher than the CPP’s total assets.
“Alberta has the right to withdraw from the CPP should it so choose. But that choice should be informed by a clear understanding of the risks … including of those stemming from the government of Alberta’s flawed analysis,” Freeland wrote in the letter.
Prime Minister Justin Trudeau has said Alberta’s potential exit would cause “undeniable” harm and that his government would do all it can to prevent it.
(Reporting by Ismail Shakil and Steve Scherer in Ottawa; Editing by Marguerita Choy)
