Reporting by Ismail Shakil and Steve Scherer in Ottawa and Maiya Keidan in Toronto; Editing by Chizu Nomiyama and Philippa Fletcher
Finance
Canadian finance minister said Alberta’s CPP exit would be a costly mistake
OTTAWA, Nov 1 (Reuters) – Alberta’s potential withdrawal from the Canada Pension Plan (CPP) would be an “irreversible mistake” and put at risk the retirements of millions of Albertans, Canada’s Finance Minister Chrystia Freeland said on Wednesday.
Alberta Premier Danielle Smith’s right-leaning government has launched a consultation process calling for an exit from the CPP, which acts for over 21 million contributors and beneficiaries across Canada.
“While Alberta has a right to withdraw should it so choose, Albertans deserve to know that doing so would be an historic, costly, and irreversible mistake,” Freeland said in a letter to Smith.
Freeland will be meeting with Alberta’s minister of finance Doug Horner and other provincial and territorial finance ministers on Friday to discuss the government’s plans to withdraw.
Any province has the right to quit by giving written notice but the value of assets to be transferred must be negotiated.
A report commissioned by the Alberta government said Alberta would be entitled to walk away with C$334 billion, or 53% of CPP assets. CPP Investments has disputed that calculation.
“As some estimates have noted, if every province and territory used the same exit formula relied on by your government, Alberta, Ontario, and British Columbia would alone be entitled to an estimated 128 per cent of CPP assets,” said Freeland in the letter.
She added that CPP Investments, which manages the assets, delivered the highest 10-year returns of any pension fund in the world between 2013 and 2022.
In 20 years, CPP Investments has grown its assets from C$36 billion to more than C$570 billion, with C$380 billion generated from investment income, Freeland said.
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