Require consent for CPP withdrawal

AI summary

Petitioners ask the Canada Pension Plan Act be amended so a province may withdraw only with the consent of at least two‑thirds of the other participating provinces that lack a comparable plan. The government responds that CPP law and the Constitution permit provincial exit without other provinces’ consent.

AI summaries describe petitioners’ requests and claims. Consult the official record for the full text.

Official petition

Petition to the Government of Canada The Canada Pension Plan Act (R.S.C. 1985, c. C-8) governs Canada’s national public pension system and allows provinces to withdraw if they establish a comparable plan and the Government of Canada approves the terms and transfer of assets; The Act requires joint consent from the federal government and two-thirds of participating provinces representing two-thirds of the population for most major changes — except in the case of a provincial withdrawal, where no inter-provincial consent is required; Withdrawal by any province could affect not only its own residents but also contribution rates, benefits, and the long-term financial stability of the Canada Pension Plan Act for all Canadians; and Extending the existing cooperative decision-making principles of the Act to include withdrawals would ensure fairness, accountability, and public confidence in Canada’s pension system. We, the undersigned, residents of Canada, call upon the Government of Canada to: 1. Amend the Canada Pension Plan Act to require that any province seeking to withdraw from the Canada Pension Plan must first obtain the consent of at least two-thirds of the other participating provinces that do not operate their own comprehensive pension plans; and 2. Protect the long-term stability and integrity of the Canada Pension Plan Act by applying the same cooperative approval standards to withdrawal that already govern other major plan changes.

Government response

Response by the Minister of Finance and National Revenue Signed by The Honourable François-Philippe Champagne The current Canada Pension Plan (CPP) legislation sets out the conditions under which a participating province may exit the plan. These conditions are: A three-year written notice of the province’s intention to offer old age pensions and supplementary benefits in lieu of the CPP and assuming all accrued obligations and liabilities in respect of employment and self-employment in that province; passage of provincial legislation enacting a comparable plan within two years of giving written notice; and issuance of a federal regulation confirming comparability between the provincial plan and the CPP. Under CPP legislation, a province may exit the plan without the consent of other provinces. This reflects the constitutional structure governing pensions in Canada. The constitutional basis for the Canada Pension Plan is section 94A of the Constitution Act, which both acknowledges concurrent provincial jurisdiction over old age pensions and provides that provincial laws are paramount over federal laws in this area. The section reads: 94A The Parliament of Canada may make laws in relation to old age pensions and supplementary benefits, including survivors’ and disability benefits irrespective of age, but no such law shall affect the operation of any law present or future of a provincial legislature in relation to any such matter. Accordingly, provincial governments retain the authority to determine whether to participate in the CPP or to establish their own pension arrangements. This principle has been foundational to the CPP since its inception and reflects the agreed upon balance of responsibilities between orders of government. Proposals that would condition a province’s ability to withdraw from the CPP on the approval of other provinces would be inconsistent with this established framework, which respects provincial jurisdiction and autonomy in pension matters. More broadly, the CPP operates as a joint federal-provincial program and major changes to the CPP legislation require the approval of the Parliament of Canada and at least seven out of 10 provinces representing at least two-thirds of the national population, including Quebec. While Quebec administers its own parallel plan (the Quebec Pension Plan, QPP), the two plans are closely aligned to ensure benefit portability. As a result, Quebec is able to vote on any CPP amendments that may have implications for its own plan. Finally, such a change would unilaterally change the original agreement made between federal and provincial governments when the Canada Pension Plan was created since the exit provisions were part of the original CPP legislation.