The Edmonton-based provincial government said on a notice on its website that for decades, given Alberta's young working population, higher employment rates and higher pensionable earnings, Alberta workers and businesses have contributed about C$60 billion ($44 billion) more into the CPP since its inception than has been paid out to Albertans during the same period.
Specifically, the report estimated that Alberta should be entitled to a C$334-billion asset transfer from the CPP in 2027 — reflecting how much Albertans have contributed to the CPP minus how much they have received in benefits since the start of the CPP in 1966, plus investment earnings on that amount.
CPP had about C$575 billion in assets as of June 30.
In addition, the report indicated that an Alberta Pension Plan could save Albertan residents C$5 billion in the first year alone. That amount could be used to increase the annual pension benefits for seniors and might include a significant hike to each senior's monthly pension payment, or even a C$5,000 to C$10,000 bonus payment at retirement, the report added.
The report also estimated that the difference between the rate Alberta workers would pay in CPP premiums and Alberta Pension Plan premiums would save Alberta workers up to C$1,425 every year (or C$2,850 for those who are self-employed) while maintaining the same level of benefits for seniors.
An Alberta Pension Plan would also cut the premiums businesses pay by up to C$1,425 per worker per year, the report suggested.
Danielle Smith, premier of Alberta and a member of the United Conservative Party (UCP), said in a statement that a "made-in-Alberta pension plan could put more money in the pockets of hard-working families and business owners and improve retirement security for seniors."
The Alberta government has asked residents of the province to review the report and provide feedback on a provincial pension plan. Through the autumn of 2023 and spring 2024, an engagement panel set up by the province will review the feedback from Albertans and subsequently submit a report to the government based on the province-wide engagement. The support from a majority of Albertans in a referendum would be necessary for the province to pursue an APP.
If a new pension plan is created, the Alberta government would work with its partners at the CPP to "develop agreements that would allow individuals to move throughout Canada without disrupting or decreasing benefits," the notice on the government website said. That measure would involve the province withdrawing assets from the CPP to establish an Alberta plan.
However, the CPP questions how much Alberta could take from the national plan should it decide to go ahead with its own fund and warns a split would put Albertans financial security at risk.
"We respect the right of Albertans to consider withdrawing from the Canada Pension Plan, however the amount the report says could be extracted from the CPP does not add up," said Michel Leduc, senior managing director and global head of public affairs and communications at CPP. "References to how much a province might claim from the CPP Fund should be regarded with caution and a high degree of skepticism until many issues are resolved between federal and provincial governments."
Leduc added: "Any idea of a withdrawal from the CPP would be complex, fiercely disputed, involve political posturing, and would result in risk for Albertans for years to come. The best way to protect the financial security of Albertans during one of the most vulnerable times of their lives is to preserve a national fund."
Rakhi Pancholi, a member of the Legislative Assembly of Alberta and the Alberta New Democratic Party, sharply criticized the proposed pension plan.
"The most insulting part of the UCP's sham report suggesting Alberta is entitled to more than half of all the assets in CPP is their assumption that Albertans would be excited about screwing over the retirements of their Canadian neighbors, families (and) friends," she tweeted on Sept. 21.
Pancholi added: "Quite frankly, if they can extract that much from the Canada Pension Plan, they will kill it. Not just for Canadians, but for us Albertans too."
Similarly, Jared Wesley, a political scientist at the University of Alberta, tweeted: "Either the Alberta government is gaslighting its own people about the prospects of taking half of the assets from the CPP. Or it's serious about killing a pension fund that has (C$11 billion) invested in Alberta, sustains a social and economic union on which the province depends."
Alberta Investment Management Corp., Edmonton, could not be immediately reached for comment.