Federal briefing note cites issues with creation of Alberta pension plan, says referendum unlikely until 2022 at earliest

Information regarding the Canadian Pension Plan is displayed of the service Canada website in Ottawa on Tuesday, January 31, 2012. (THE CANADIAN PRESS/Sean Kilpatrick)

Federal officials believe Alberta won't hold a referendum on creating its own pension plan until 2022 at the earliest, citing a lack of public support and administrative obstacles, according to a briefing note.

Civil servants drafted the document in 2020 for Minister of Seniors Deb Schulte. It was obtained by CTV News through an access to information request. 

"It is unlikely that the Alberta government will be moving forward with a referendum on withdrawal from the CPP [Canada Pension Plan] in 2020 or 2021,” it reads.​

Last summer, the province's Fair Deal Panel included the creation of a provincial pension plan among its recommendations, citing cost savings due to Alberta’s relatively young population and province's ability to manage its own assets.

The briefing note for Shulte challenges those findings, arguing the panel’s report falls short in a number of respects.

"In general the Panel’s report presents a positive case for withdrawing from the CPP, downplaying the potential risks of such a move."

Premier Jason Kenney said in March that his government would make a decision in the spring of 2021 on whether to pursue the creation of an Alberta pension plan and eventually withdraw from the CPP.

A spokesperson for the premier's office says a decision hasn't yet been reached and "work is ongoing to complete a full analysis" of an potential Alberta pension plan.

"The premier has always been clear that such a consequential decision would need to be put directly to voters."

'HIGHER LEVELS OF RISK'

The Fair Deal Panel's report suggests that an Alberta pension plan would have a contribution rate of 5.85 per cent compared to the national contribution rate of 9.9 per cent.

It also cites a policy briefing from Keith Ambachtsheer with the C.D. Howe Institute claiming Alberta would receive between $40 billion and $70 billion from the CPP Fund as part of its withdrawal.

While the panel used the Howe Institute’s report to estimate the amount of funds, it excludes other parts of the same report that paint a less optimistic picture of withdrawing from CPP, according to the federal briefing note.

“Ambachtsheer also warned that the departure from the CPP’s asset management governance would result in Alberta’s pension fund being exposed to higher levels of risk.”

The note argues the panel’s report fails to address issues around pension portability, and stresses the need for three-way negotiations with the governments of Canada and Quebec should Alberta elect to withdraw from the CPP.

“The report suggests that some or all of the Alberta’s plan’s funds could remain the management of the Canada Pension Plan Investment Board (CCPIB), despite the fact this would counter to CPPIB’s mandate - and changing the mandate to allow it would require the consent of two thirds of provinces.” 

The note's authors argue the panel's report also ignores the need to create new infrastructure to collect and pay benefits around an Alberta plan.

"In fact, a later recommendation advises against the creation of an Alberta-only provincial revenue agency."

The note cites the panel's own polling data showing 58 per cent of respondents didn't believe that withdrawing from CPP would help improve Alberta's place in federation, and another poll showing 36 per cent of respondents supported withdrawing.

It also notes both polls occurred before the COVID-19 pandemic in March of 2020, and April 2020 reporting on the Alberta Investment Management Corporation​'s loss of up to $3 billion due to its volatility strategy.

Quebec was the only province to opt out of the CPP when it was created in 1966.