Withdrawing from Canada Pension Plan would come with $133B unfunded liability, Alberta NDP says
Premier Jason Kenney accuses Official Opposition of 'gross financial illiteracy'
An internal government document obtained by the Opposition NDP says Alberta would assume an unfunded liability of $133 billion if it left the Canada Pension Plan to create a plan of its own.
NDP Leader Rachel Notley said Monday the briefing note for Finance Minster Travis Toews was prepared in September, two months before Premier Jason Kenney announced the creation of the Fair Deal Panel. The panel was tasked with looking at ways for Alberta to have a stronger role in Confederation.
In its final report, released last week, the panel endorsed the creation of an Alberta Pension Plan. Kenney said the matter would be sent to officials in Treasury Board and Finance for additional study and would ultimately be decided through a province-wide referendum.
Notley said she is concerned that the document would have never seen the light of day if her staff hadn't obtained it through a freedom of information request. She accused Kenney of hiding the information from the public.
"This information did not find its way into the Fair Deal Panel's report," Notley said. "It absolutely should have."
Liability already exists, Kenney says
In question period Monday, Kenney accused the NDP of "gross financial illiteracy."
"That unfunded liability exists today for the Alberta portion of the Canada Pension Plan," he said in response to questions from Notley.
"If Alberta were to patriate its portion of the pension plan, because we have the youngest population the unfunded liability would actually shrink from the portion that we currently owe to the Toronto-operated Canada Pension Plan."
Both Kenney and Toews told the legislature that members of the Fair Deal Panel had access to the document.
Two-thirds consent required
The briefing note, dated Sept. 18, 2019, seeks to "provide information and analysis on the potential establishment of an Alberta Pension Plan."
The downsides indicated in the report include higher administrative costs for an Alberta plan and more volatile contribution amounts.
Compared to the CPP, it says an Alberta plan would have a smaller contribution base to absorb the risks caused by "longevity, mortality and investment."
It says that while Alberta appears to pay more into the program and receives less, demographics offer an explanation. The province has a younger population and fewer seniors than other provinces. Some contributors spend their working lives in Alberta but move to other provinces after they retire.
The report warns that risks more easily absorbed by the CPP's larger contribution base would be more notable with under an Alberta Pension Plan, which would create greater volatility for contribution amounts.
Finally, the document notes that withdrawing from CPP would require consent from two-thirds of Canada's provinces with two-thirds of the country's population.