Letter from the Deputy Prime Minister to provincial and territorial Finance Ministers regarding the Canada Pension Plan

Dear Colleagues:

I am writing to confirm a special virtual meeting of Federal-Provincial-Territorial Finance Ministers on November 3, 2023, where we will discuss the Government of Alberta’s proposed withdrawal from the Canada Pension Plan (CPP).

For six decades, the CPP has been the bedrock of a secure and dignified retirement for Canadians from coast to coast to coast.

CPP Investments—the Crown corporation which invests Canadians’ pensions—is a world- leading investment body which safely generates the best possible returns for Canadian pensioners.

Over the past twenty years, CPP Investments has grown the CPP’s assets from $36 billion to more than $570 billion, of which about $380 billion was generated from investment income. In fact, between 2013 and 2022, CPP Investments delivered the highest ten-year returns of any pension fund in the world.

As well as providing Canadians with world-leading returns on their pension contributions, the CPP also ensures Canadians can live, work, and retire anywhere in Canada, while protecting their pensions from the risks of economic downturns in any one province or territory.

Like each of you, I have heard serious concerns from Canadians—including Albertans— regarding Alberta’s proposal to withdraw from the CPP.

Canadians work hard with the promise that a secure pension will be there for them when they retire—and they know that Alberta’s proposed withdrawal is a threat to the pensions of people in Alberta and across Canada.

Alberta has the right to withdraw from the CPP should it so choose. But that choice should be informed by a clear understanding of the risks posed by leaving the CPP—including of those stemming from the Government of Alberta’s flawed analysis of the share of CPP assets to which the government claims Alberta would be entitled.

As part of our discussions, I would like to specifically speak to the flaws underlying Alberta’s proposed exit formula. As an illustration of some of the challenges with the formula, some estimates note that were it to be applied to Alberta, Ontario, and British Columbia, those three provinces would be ostensibly entitled to 128 per cent of CPP assets. Clearly, such an outcome would be untenable and absurd.

Protecting the pension security of the Canadians we represent is a goal that I know each of us shares—and I look forward to discussing this with you on Friday.

Sincerely,
 

The Honourable Chrystia Freeland, P.C., M.P.
Canada’s Deputy Prime Minister and Minister of Finance