Is Alberta Mulling an Exit From the Canada Pension Plan?

Alberta premier Danielle Smith is once again touting ideas to make the province even less dependent on Ottawa, this time reigniting a plan to withdraw from the Canada Pension Plan and enroll Albertans in a unique provincial plan instead.

The idea of an Alberta Pension Plan (APP) has been contemplated for more than 20 years; however, the notion of withdrawing from the Canada Pension Plan (CPP) has gained noticeable momentum in recent months. The principal argument favouring an APP is demographic— given Alberta’s younger population base, a provincial plan could potentially provide similar benefits to the CPP but require smaller contributions.

But, given that a province has never left the CPP, several questions arise about how Alberta would carry out this process. There are three conditions stipulated by CPP legislation that Alberta would need to fulfill: first, give three years’ notice of its intent to withdraw; second, assume all accrued obligations and liabilities; and third, enact legislation within one year after the notice is provided. Additionally, a federal regulation would need to pass, recognizing the provincial pension plan as “comparable” to the CPP.

In a letter to Finance Minister Nate Horner, Smith has instructed that a report be commissioned on consultations with Albertans on whether or not a referendum should be held to create an APP, as well as to determine the benefits, if any, of establishing an Alberta Revenue Agency to collect the province’s tax revenues.

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