'We will not stand by as anyone seeks to weaken pensions,' Trudeau wrote
Prime Minister Justin Trudeau has sent an open letter to Alberta Premier Danielle Smith calling her efforts to pull Alberta out of the Canada Pension Plan a risk to "certainty and stability."
"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," Trudeau said in the letter.
"Alberta's withdrawal would weaken the pensions of millions of seniors and hardworking people in Alberta and right across the country. The harm it would cause is undeniable."
Last month, Smith released a long-awaited report by consultant LifeWorks. It claims that if Alberta pulled out of the CPP, it would be entitled to $334 billion — more than half of the fund's assets.
Smith has long called for Alberta to leave the CPP and told reporters after the release of the LifeWorks report that "an Alberta pension plan would be fairer and could make life more affordable for all Albertans."
Trudeau's open letter criticized that claim, insisting that pulling out of the CPP would only "introduce even more uncertainty and instability."
"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's letter said.
The prime minister said that in a time of high inflation, climate change and conflict, political leaders should strive for certainty over instability. He vowed to challenge's Smith's CPP plans.
"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," he said.
"We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians."
Watch: Proposed Alberta pension plan entitled to half of CPP's assets, report says:
Proposed Alberta pension plan entitled to half of CPP's assets, report says
Featured VideoA report commissioned by the government of Alberta says a proposed Alberta Pension Plan would be entitled to about half of the assets of the Canada Pension Plan.
Smith fired back at Trudeau on Wednesday in her own open letter. She rejected Trudeau's description of the effects Alberta's withdrawal would have on the CPP.
"It is disingenuous and inappropriate for you to stoke fear in the hearts and minds of Canadian retirees on this issue," Smith wrote to Trudeau.
The premier accused Trudeau of imposing more costs on Albertans through the federal carbon tax and claimed the prime minister might attempt to block the province from withdrawing from the CPP.
"Any attempt to do so will be seen as attack on the constitutional and legal rights of Alberta, and met with serious legal and political consequences," she wrote.
Minister of Employment, Workforce Development and Official Languages Randy Boissonnault, the only Liberal minister from Alberta, told reporters Wednesday that Smith's CPP plan is "a massive distraction and nobody should be playing politics with pensions."
"The overwhelming majority of emails and phone calls that I'm getting are that Albertans want to stay in the CPP," he said. "I guess the question is, why this distraction and why now?"
NDP MP Heather McPherson said Trudeau's intervention is welcome but simply sending a letter to Smith won't be enough.
"Leaving CPP will be bad for every working Albertan, and seniors all over the country," she said. "While seniors beg Danielle Smith not to do this, she's set on going forward with gambling with Albertans' retirement funds."
LifeWorks numbers challenged
Critics have ripped into the math underlying the conclusions in the LifeWorks report.
Michel Leduc is senior managing director of the non-partisan Canada Pension Plan Investment Board, which manages the fund's assets for Canadians. He immediately dismissed the $334 billion claim as an "impossible figure."
"It's basically invented, and then you end up with this very, very large figure that would not work," said Leduc, adding that his organization respects the rights of provinces to withdraw and create their own pension plans.
University of Calgary economist Trevor Tombe published a paper estimating that Alberta is entitled only to about 20 to 25 per cent of the fund.
"I think it was a little problematic that the government's hanging its hat on half the CPP assets, which you think is kind of transparently unreasonable and not going to fly anywhere else in the country," he said.
A 2019 briefing note from Alberta's Finance Department to Travis Toews, who served as finance minister to both Smith and former premier Jason Kenney, estimated Alberta's slice of CPP assets at less than 12 per cent.
Alberta has floated the idea of holding a referendum on withdrawing from the CPP as early as 2025.
According to the first major poll conducted since Smith began making pitch to take Alberta out of the CPP, the proposal is widely opposed by Albertans.
Fifty-two per cent of Albertans polled by Abacus Data said they think it's a bad or very bad idea, compared to 19 per cent who think it's a good or very good one, and 15 per cent who are in the middle.
The few who support it are overwhelmingly younger Albertans — those farthest away from receiving pensions who are therefore less vulnerable to dramatic changes to the retirement fund.
ABOUT THE AUTHOR
Peter Zimonjic is a senior writer for CBC News. He has worked as a reporter and columnist in London, England, for the Daily Mail, Sunday Times and Daily Telegraph and in Canada for Sun Media and the Ottawa Citizen. He is the author of Into The Darkness: An Account of 7/7, published by Random House.
With files from Jason Markusoff
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