HEY TBA/UCP LEAVE MY PENSION ALONE
Canada to do all it can to prevent Alberta quitting pension plan -PM

David Ljunggren and Maiya Keidan
Updated Wed, October 18, 2023 

FILE PHOTO: Canadian Prime Minister Justin Trudeau speaks during a press conference on the sidelines of the UNGA, in New York

By David Ljunggren and Maiya Keidan

OTTAWA (Reuters) -Canada will do all it can to prevent the oil-producing province of Alberta from leaving the Canada Pension Plan (CPP), a move that would cause "undeniable" harm, Prime Minister  said on Wednesday.

In a letter to Alberta premier Danielle Smith, Trudeau said a withdrawal would weaken the pensions of millions of people across Canada.

Smith, whose right-leaning government has clashed with Ottawa on several issues, says an Alberta pension scheme would save the province billions.

"I have instructed my Cabinet and officials ... to do everything possible to ensure CPP remains intact," Trudeau said.

"We will not stand by as anyone seeks to weaken pensions and reduce the retirement income of Canadians."

In a reply posted to social media, Smith told Trudeau it was "disingenuous and inappropriate to stoke fear" about the CPP and said any bid to prevent Alberta from withdrawing would result in unspecified serious and legal political consequences.

Albertans will have until early 2024 to submit their views to a panel, which will then report back to the government.

The idea of quitting was formally suggested by the panel. The CPP wrote to panel head Jim Dinning on Tuesday to say breaking away would have an impact on Albertans for generations.

Duane Bratt, a political science professor at Mount Royal University in Calgary, said Trudeau's letter might damage the case for CPP given the extent of the bad blood between him and Smith. She says the federal Liberal government's environmental policies could kill the Albertan energy industry.

"I think Trudeau is correct in outlining the risks of Alberta pulling out of the CPP but I think he's also fallen into a trap here because if the debate in Alberta is only about pension split, it's going to lose that debate," he said.

"But if she (Smith) can convert this into 'Let's fight Trudeau,' she's got a much better chance of winning."

Any province has the right to quit but the value of assets to be transferred must be negotiated. Alberta says it could take more than half the fund's assets, an assertion the CPP says is not true.

The CPP dwarfs all other pensions and acts for 21 million contributors and beneficiaries. The predominantly French-speaking province of Quebec has its own system.

Doug Martin, president of the Alberta chapter of the Canadian Association of Retired Persons, opposes withdrawal as the sums do not add up and CPP is already effective.

"He (Trudeau) did the right thing - just nothing he does ever resonates very well in Alberta," he said.

The CPP did not respond to a request for comment on the letter, which was released by Trudeau's office.

Employees and employers pay a combined 11.9% of a worker's pay into the CPP on income of between C$3,500 and C$66,600. The fund pays out pensions to retirees, starting at age 60.

(Reporting by Ismail Shakil and David Ljunggren in Ottawa and Maiya Keidan in Toronto; editing by Jonathan Oatis)