Honourable senators, I rise today to speak to Motion No. 172, which proposes that the Senate of Canada call on the Chief Actuary within the Office of the Superintendent of Financial Institutions to publish an actuarial study that reports on:

(a) a possible exit of Alberta from the Canada Pension Plan (CPP), including an analysis of the viability of the CPP after such an exit by Alberta;

(b) a reasonable estimate of an exit cost of Alberta’s share of the Canada Pension Plan fund; and

(c) any other information that the Chief Actuary deems to be relevant in the study of this issue . . . .

The motion further calls on the Office of the Parliamentary Budget Officer to study a possible exit of Alberta from the CPP, including any fiscal/economic impacts of such an exit from the CPP on Canadians.

As a proud Albertan and a proud Canadian, I think the voters of Alberta and the citizens of Canada need to have the most accurate, independent and non-partisan information possible about the economic consequences of Alberta’s proposed withdrawal from the Canada Pension Plan.

This is a national issue because the impact of Alberta’s exit on the security and sustainability of the CPP could be tremendous and also because Alberta is a province where Canadians from across the country come to work and to earn pensionable income. There are people living in Corner Brook and Charlottetown, Toronto and Tofino, Saskatoon and Saint John, Whitehorse and Winnipeg, who might have worked some or all of their careers in Alberta, and they have a right to know what will happen to their pensions if Alberta quits.

It’s quite a possible scenario that if Alberta withdraws from the CPP, people who have worked in Alberta for most or all of their careers but moved and retired elsewhere would automatically be ineligible for the CPP. They would receive benefits from this proposed Alberta pension plan, but they wouldn’t have had a chance to vote in the referendum that could have a real impact on their own retirements.

Let it be said that the Canada Pension Plan is one of the world’s most successful pension plans. As of December 31, 2023, it was worth $590.8 billion. It had a 10-year annualized net return of 9.3%, earning a cumulative net income of $319.4 billion in the last 10 years. In a recent report published by the Global Pension Transparency Benchmark, which ranks the world’s top 1,000 pension funds, the Canada Pension Plan ranked second out of 1,000 pension funds for overall transparency, cost and performance, second only to that of Norway. When it came to the category of governance, the Canada Pension Plan, or CPP, was ranked number one in the world.

The CPP’s governance is jointly managed by the provinces and the federal government. However, the fund itself is administered by an independent board. No prime minister, finance minister or group of premiers can interfere with its investment decisions, and it’s harder to change that government’s structure than it is to amend the Constitution itself. Indeed, it would require the consent of two thirds of provinces representing two thirds of Canada’s population.

The Canada Pension Plan Investment Board is a major international actor, with offices in London, Luxembourg, Mumbai, Hong Kong, New York, San Francisco, São Paulo and Sydney. Its goal isn’t to fulfill anyone’s political dreams or business ambitions. Indeed, only 14% of the fund’s assets are invested in Canada. The strategy is to put our nest eggs in as many baskets as possible.

The CPP is also completely portable. It allows people to look for work in any province, knowing that their pension will follow them wherever they move next. Because of that security, someone who works in Edmonton can take a job in Ottawa. Someone who lives in Glace Bay can fly in regularly to work in Fort McMurray. Someone who lives in Grande Prairie can retire to Kelowna. This portability doesn’t just help workers. It helps employers recruit the talent they need from across the country and to respond quickly to labour shortages in times of economic boom.

Indeed, you could call the CPP Alberta’s secret weapon. No province in Confederation has benefitted more from this seamless system which makes it easy for Alberta businesses to bring in staff when and where needed. Perhaps that’s why the CPP is so popular across Canada and within Alberta. A poll released late last month by Bruce Anderson and spark*advocacy found that 88% of Canadians — including 81% of Albertans — believe the Canada Pension Plan should be maintained as a national program.

So why is Alberta proposing to pull out of a successful, well‑regarded pension plan?

Some Albertans argue that we pay a disproportionate amount into the national pension fund and don’t get our fair share back. It is true that on a year-by-year basis, Albertans, in aggregate, pay more into the Canada Pension Plan than Albertans, in aggregate, get paid out. However, that’s because our province has a young population with many young workers, an extremely high workforce participation rate and higher-than-average salaries — and, of course, because quite often, Alberta seniors head to warmer parts of Canada to retire.

As a province, we simply have more workers and fewer pensioners. That doesn’t mean the fund is unfair. It means that individual Albertans will reap their benefits when they retire, wherever they retire, and most of them will individually draw larger pensions because they will have made more pensionable earnings.

Then, of course, there are Albertans who believe we should have our own pension plan specifically so that Alberta can use it to direct investment to Alberta’s energy sector at a time when resource extraction companies are finding it harder and harder to attract international investment capital. One might wonder if micromanaging a pension fund to support a specific troubled industry is the best way to protect Albertans’ retirements, especially contrasted with the CPP’s global strategy.

Finally, there are some in Alberta who want us to withdraw from the CPP on principle — no matter the economic costs — as a symbol and signal of Alberta autonomy. They see an Alberta pension plan as the first step toward sovereignty-association or even separation. For them, this isn’t an argument about economics or logic. It’s about political independence and cultural identity.

Against this backdrop, this past September, the Government of Alberta released a report by consultants that outlined how Alberta might set up its proposed stand-alone pension plan. The report concluded that based on a literal reading of the legislation, Alberta was actually entitled to withdraw 117% of the total value of the Canada Pension Plan’s assets. Yes, I said 117%.

However, the consultants recognized that such a plan — to withdraw more money than was actually in the fund — was probably impractical. As a compromise, they suggested a reading that would entitle Alberta to 53% of the fund’s total assets. That’s $334 billion, which would, of course — for the record — be more than the entire earnings of the fund over the last 10 years.

Based on this provocative premise and the assumption that Alberta’s population demographics remain younger than the national average, the report predicts Alberta workers and employers would make smaller contributions to a proposed Alberta pension plan than they now do to the CPP while drawing larger pensions than other Canadians when they retire. Predicated on those very particular assumptions, the consultants estimated that an Alberta pension plan could save top earners in the province as much as $1,400 a year. The report, however, was silent on how much average or low-income wage earners in Alberta might be likely to save. However, those potential savings are indeed predicated on a model that would allow Alberta to pull out more than half the total value of the CPP as it left.

Albertans have been told that they will have a chance to vote in a future referendum on the establishment of an Alberta pension plan. But how can they make an informed decision without knowing whether that 53% estimate and the projections that flow from it are plausible? As well, how can they in good conscience decide without understanding the impact of their withdrawal upon their fellow Canadians?

That’s why, last December, I gave notice of this motion, which calls on the Office of the Chief Actuary, or OCA, to prepare a report to answer these very questions.

The Office of the Chief Actuary is an independent unit within the Office of the Superintendent of Financial Institutions. Although its Chief Actuary, Assia Billig, reports to the superintendent, she is solely responsible for the content and actuarial opinions in her reports.

The Office of the Chief Actuary was created to provide actuarial and other services to the Government of Canada as well as the provincial governments, who are stakeholders in the Canada Pension Plan. Because the office exists outside of government, it is set up to be impartial and independent.

I’m happy to say that things have advanced somewhat since I first put this motion on the Notice Paper. Last month, Dr. Billig — who, as it happens, holds a PhD in Mathematics from the University of Alberta — struck an expert committee of five independent actuaries, who have been tasked with the job of reviewing the somewhat contentious legal and technical language of the Canada Pension Plan Act and coming up with their own analyses and assessments of what Alberta’s fair share of the fund should be. That five-person panel is supposed to complete its work later this spring. Then the Chief Actuary will make her own report sometime late this autumn.

Given that update, the motion before us may now appear redundant. But Motion No. 172 goes further than just determining how much Alberta is owed. It explicitly asks for an analysis of the viability of the CPP after such an exit by Alberta, and it empowers the Chief Actuary to report on any other issues she deems relevant. What’s more, so much of what has been going on in relation to this file has been happening very quietly behind the scenes, out of public view. On an issue such as this, I think it’s important — indeed, it’s essential — that we be transparent and put this request and the report it would produce on the public record.

As Senators, we represent our provinces and regions. If the independent Senate itself asks for such a report, it has a different significance than if a government that is party to the negotiations asks for it.

Motion No. 172 further asks the Parliamentary Budget Officer, or PBO, an independent officer of parliament, to prepare his own separate independent report on what Alberta’s departure might mean for the federal exchequer and government finances more broadly. This is not a duplication. I’m not asking the PBO to produce a rival or separate analysis of what Alberta is owed. That should properly be the work of the Chief Actuary, who will have the most complete data set at her disposal.

However, the future viability of the Canada Pension Fund wouldn’t just have an impact on pensioners. Stripping the fund of more than half its assets and thus reducing its influence in international markets could have far-reaching economic consequences for the country and the federal government, especially if Ottawa then has to step into the breach to take steps to backstop retirement plans for people in the other provinces. That’s why I believe the Parliamentary Budget Officer should issue his own independent report on this matter.

I hope you will join with me in making this request — and in a timely fashion. Albertans need accurate, independent, objective data before they make this momentous decision, as do all other Canadians.

Thank you. Hiy hiy.

I would be happy to take a question.

Thank you for the excellent question, and I confess, when I was drafting my speech, I was thinking more about people who work in the oil and gas sector, but you are absolutely right. As I say, part of Alberta’s magic formula is the ability to attract workers when they need them, and those workers know that their pensions are portable. The employers know they don’t have to figure out another separate pension plan.

I think for seasonal workers, this is absolutely essential for Banff, Jasper and other national parks and tourist sites to attract workers. Indeed, there may be an impact on seasonal agricultural workers, including those who come from other countries, because right now the CPP has agreements with I think 70 foreign countries to harmonize pension plans, and Alberta Pension Plan, or APP, wouldn’t have that, not right out of the gate.

I would be delighted.

I would love to ask for five more minutes, but I realize I’m standing between the chamber and dinner.

The Alberta government has been engaged in an extremely sophisticated messaging campaign to try and speak to Albertans and explain why they think an Alberta pension plan is viable, but it’s been difficult to get consistent polling data, and as you would know, polling results depend on how you ask the question.

I saw a story just today in my former newspaper, the Edmonton Journal, where the paper had attempted to file an access to information request to get some of the documents from the round tables and the open houses that the government has been hosting. The government has refused to release those documents claiming that these question-and-answer sessions constitute advice to government and thus are to be held in confidence.

I think that Albertans, if they have the accurate information about what this pension plan would actually get in terms of starting assets, would have a very different response than being told that they will automatically get 53% of the fund. That’s why I think it is absolutely essential that we get this information and in the most timely way possible, so that Albertans can make up their own minds with objective data.