William Watson: Alberta should take a 'random' walk out of the CPP
If you and I opened a joint savings account and, after a few years, one of us decided to pull out, the division of the remaining balance presumably would have something to do with how much each of us had put in over the years, what the return on our joint savings had been, and what it had cost to run the account (i.e., just how exorbitant the bank charges had been). And, of course, it would help a lot if at the outset we had written down the rules under which either of us could withdraw.
The Canada Pension Plan, established in the mid-1960s and substantially re-jigged in the 1990s, is a little more complicated than a joint savings account — OK, it’s a lot more complicated — but when it was set up the provinces who joined write themselves rules to govern how much a province would take with it if it decided to withdraw. The operational part of those rules is reproduced below. Granted: to understand them, it’s probably better to be a lawyer or accountant, maybe both, even if the several excisions indicated by ellipses do make the original a little clearer.
But the principle seems to be: consider what provinces contributed, what they took out and what their fair share of the plan’s administration costs was. Of course, provinces don’t finance pension plans, people and businesses do, so tracking problems arise. If people who worked in Alberta all their lives retire to British Columbia, should their CPP benefits be credited to their old home province or their new one?
What I read suggests withdrawal provisions were written into the CPP at the insistence of Ontario premier John Robarts, a proud and devoted Canadian (born in Alberta) who was a key player in remaking this country in the 1960s. The deep principle behind them was
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