A report commissioned by the Alberta government estimates the province would be entitled to more than half the assets of the Canada Pension Plan if it were to exit the national retirement savings program and go it alone.
A third-party report compiled by consultant LifeWorks Inc. (now part of Telus Health) calculated that if Alberta gave the required three-year notice to quit the CPP next year, it would be entitled to $334 billion — or about 53 per cent — of the national pension plan’s pool by 2027.
Alberta would be the first province to quit the CPP. Quebec never joined when it was set up in 1965.
Given Alberta’s young workforce and growing economy, the province has no choice but to let residents choose whether to have an Alberta Pension Plan, said Finance Minister Nate Horner in a press release. “We have a responsibility to present these findings to Albertans and gather their feedback. Albertans will make the final decision on where we go from here. It’s your pension, your retirement and your future.”
In 2020, then premier Jason Kenney convened a panel to explore the option. The panel recommended the provincial government withdraw from the CPP and create an APP, subject to a referendum. In addition to the panel, previous provincial governments have raised the idea, including current Premier Danielle Smith.
The LifeWorks report estimated the difference between the rate Alberta workers would pay in CPP premiums and APP premiums would save Alberta workers up to $1,425 every year ($2,850 for those self-employed) while maintaining the same level of benefits for seniors.
It also estimated that setting up an Alberta plan would cost between $100 million and $1 billion, depending on how much the province piggybacks on CPP mechanisms. The cost of implementing the investment arm of an Alberta plan would be another $75 million to $1.2 billion, again depending on how much the province taps into existing structures and expertise.
Over the fall and into spring 2024, an engagement panel will gather feedback from Albertans on their thoughts, suggestions and concerns about a provincial pension plan. The panel will then submit a report to government and a referendum indicating support from a majority of Albertans would be required to pursue an APP.
“The job of the panel is straightforward,” said Jim Dinning, chair of the APP engagement panel. “We ask Albertans to look at the facts, participate in the discussions and then tell us what they think about an Alberta Pension Plan and the different options we must consider.”