MP proposes stricter conditions for provinces leaving CPP

MP notes the impact of such an exit to Canadians' security

MP proposes stricter conditions for provinces leaving CPP

EDMONTON — New Democrat MP Heather McPherson has introduced a bill in the House of Commons aiming to make it harder for provinces to withdraw from the Canada Pension Plan (CPP).

McPherson, who represents Edmonton-Strathcona, unveiled Bill C-387: An Act to amend the Canada Pension Plan on April 30. The proposed legislation would require any province seeking to exit the CPP to obtain the approval of two-thirds of the other provinces, excluding Quebec, representing two-thirds of the Canadian population.

“Once provinces choose to leave the CPP, it weakens it,” McPherson said. “It’s very easy to break it one brick at a time.”

Current requirements

Presently, a province wishing to leave the CPP must:

  1. Provide three years’ notice of its intention to withdraw.
  2. Enact legislation within one year of that notice.
  3. Have the new provincial plan recognized by the governor general, on the advice of the cabinet, as comparable to the CPP.

McPherson argues that these requirements are insufficient to protect Canadians who rely on the CPP. She warns that the departure of a province like Alberta could lead to higher premiums or reduced benefits for those remaining in the CPP.

“All Canadians who are depending on this highly regarded pension plan to have a dignified retirement will start to see a CPP that doesn’t exist anymore,” she stated.

Alberta’s position

According to a report from Edmonton Journal, the bill comes amid Alberta’s ongoing consideration of establishing its own pension plan. The province is awaiting a report due in the fall from the office of the chief actuary, detailing the financial implications of such a move.

Despite repeated requests, the Alberta government has not released the results of its pension engagement survey. However, other polling and public feedback indicate that leaving the CPP is generally unpopular among Albertans. Jim Dinning, chair of the pension engagement panel, reported in December that about half of the feedback was opposed to the idea.

Political reactions

Prime Minister Justin Trudeau, Opposition Leader Pierre Poilievre, and NDP Leader Jagmeet Singh have all voiced opposition to Alberta’s potential departure from the CPP. Conversely, the Bloc Quebecois has affirmed Alberta’s right to leave if it meets the current legal requirements.

McPherson acknowledges that passing her bill will be challenging but remains hopeful. “If the government is willing to take this on, I’d be more than happy,” she said.