Alberta owed less money than estimated in potential CPP exit: chief actuary

Falling Canadian dollars coins or loonies are pictured in North Vancouver, B.C. Wednesday, May 29, 2019. (THE CANADIAN PRESS/Jonathan Hayward)

Canada’s chief actuary believes Alberta would be entitled to less money from the Canada Pension Plan than was estimated in a report released by the province last year.

Assia Billig, the country’s chief actuary, was asked to provide her position on the CPP legislation after Alberta released an actuarial report prepared by LifeWorks on a potential exit from the federal plan and subsequent Alberta pension plan.

“In developing her position, the chief actuary primarily relied on a close reading of the (CPP) act,” the report states.

“The position therefore reflects the chief actuary's opinion and best judgment of the meaning of the legislation's wording and textual indications.”

The LifeWorks report calculated that Alberta would be entitled to $334 billion, or about 53 per cent, of the national pension plan’s pool.

The chief actuary also took into account a paper from Trevor Tombe, a University of Calgary economics professor, which argued that Alberta would actually be entitled to a smaller chunk, between 20 and 25 per cent, of the CPP assets if it withdrew.

An Independent Advisory Panel (IAP) comprised of relevant experts was brought together to provide their opinions on the various approaches.

Four of the five experts preferred Tombe’s interpretation over LifeWorks’.

The fifth member of the panel “was not prepared to opine on a preferred method of allocation of (net investment return) based on their actuarial expertise and available information.”

The report stated that while the chief actuary’s position was developed independently, her findings are consistent with those of the IAP and Tombe’s paper.

While the report doesn’t include an exact figure of what Alberta would be entitled to, it notes that the chief actuary’s position on this issue is meant to help support the federal finance minister in determining the exact amount that would be paid out.

“Given that the legislative responsibility to calculate and pay the amount resides with the minister of finance, the final position on subsection 113(2) of the Act is that of the minister's,” the report said.

Last week, Alberta Premier Danielle Smith expressed disappointment that the report did not include an estimate of how much money the province would receive from CPP if it created its own provincial plan.

The province has been waiting months for the review of the legislation and a figure. Smith said Thursday her government will follow up to get clarity on the next steps.

With files from The Canadian Press