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Alberta

Here’s why the rest of Canada doesn’t want Alberta to leave the CPP

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4 minute read

From the Fraser Institute

By Tegan Hill Associate Director, Alberta Policy, Fraser Institute

Provincial and territorial finance ministers recently met with federal Finance Minister Chrystia Freeland to discuss a hot topic—Alberta’s potential withdrawal from the Canada Pension Plan (CPP). According to Nova Scotia Finance Minister Allan MacMaster, “there was real consensus” from his peers that they want Alberta to stay in the CPP. This is unsurprising; while an Alberta pension plan would benefit Albertans, it would come at great cost to the rest of Canada.

Why might Albertans want to leave the CPP?

Albertans pay a basic CPP contribution rate of 9.9 per cent, typically deducted from their paycheques. According to a report commissioned by the Smith government, that rate would fall to 5.91 per cent for a new CPP-like provincial program for Albertans, which means each Albertan would save up to $2,850 in 2027 (the first year of the hypothetical Alberta plan) while maintaining the same retirement benefits. In sharp contrast, to keep the CPP afloat without Alberta, the basic contribution rate for the rest of Canada would increase to 10.36 per cent. In other words, smaller paycheques for the rest of Canada.

The report’s calculation is based on several assumptions, which some analysts have criticized, arguing that Alberta’s estimated share of CPP assets—$334 billion—is not fair or realistic. To be clear, this share (equal to 53 per cent of the CPP) is based on specific legislation that governs the withdrawal of any province from the CPP. But, even if the share of assets to Alberta were much lower, the province would benefit from reduced contribution rates with an Alberta pension plan.

For instance, if Alberta left the CPP and received merely 25 per cent of the CPP’s assets in 2025 ($150 billion), the contribution rate in Alberta would fall from 9.9 per cent to 7.8 per cent, which would mean $1,086 in savings annually per Albertan. Meanwhile, the contribution rate for the rest of Canada would have to increase. If you dropped Alberta’s share to 20 per cent ($120 billion in 2025), Alberta’s contribution rate would fall to 8.2 per cent, equivalent to approximately $836 in savings annually per Albertan.

Put differently, even if Alberta’s share of assets were less than half the report’s estimate, Albertans would benefit from lower contribution rates for the exact same benefits while the rest of Canada may pay higher contributions to maintain current benefits. Why does Alberta mean so much to the CPP? Because Alberta generally has higher employment rates and a comparatively younger population, which means more workers pay into the fund and less retirees take from it. Albertans also have higher average incomes, which means there’s a higher level of premiums paid into the fund. As such, Albertans have paid significantly more into the CPP than its retirees have received in return.

It’s not surprising that the rest of Canada doesn’t want Alberta to leave the CPP for an equivalent provincial plan because—even if Alberta’s share is less than $334 billion, Alberta’s withdrawal would come with big costs for other Canadians across the country.

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Alberta

They never wanted a pipeline! – Deputy Conservative Leader Melissa Lantsman

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From Melissa Lantsman

Turns out the anti-development wing of the Liberal Party never stopped running the show.

Today, we’ll see if the Liberals vote for the pipeline they just finished bragging about.

Spoiler: they won’t. Because with the Liberals, the announcements are real, but the results never are.

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Alberta

Premier Smith: Canadians support agreement between Alberta and Ottawa and the major economic opportunities it could unlock for the benefit of all

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From Energy Now

By Premier Danielle Smith

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If Canada wants to lead global energy security efforts, build out sovereign AI infrastructure, increase funding to social programs and national defence and expand trade to new markets, we must unleash the full potential of our vast natural resources and embrace our role as a global energy superpower.

The Alberta-Ottawa Energy agreement is the first step in accomplishing all of these critical objectives.

Recent polling shows that a majority of Canadians are supportive of this agreement and the major economic opportunities it could unlock for the benefit of all Canadians.

As a nation we must embrace two important realities: First, global demand for oil is increasing and second, Canada needs to generate more revenue to address its fiscal challenges.

Nations around the world — including Korea, Japan, India, Taiwan and China in Asia as well as various European nations — continue to ask for Canadian energy. We are perfectly positioned to meet those needs and lead global energy security efforts.

Our heavy oil is not only abundant, it’s responsibly developed, geopolitically stable and backed by decades of proven supply.

If we want to pay down our debt, increase funding to social programs and meet our NATO defence spending commitments, then we need to generate more revenue. And the best way to do so is to leverage our vast natural resources.

At today’s prices, Alberta’s proven oil and gas reserves represent trillions in value.

It’s not just a number; it’s a generational opportunity for Alberta and Canada to secure prosperity and invest in the future of our communities. But to unlock the full potential of this resource, we need the infrastructure to match our ambition.

There is one nation-building project that stands above all others in its ability to deliver economic benefits to Canada — a new bitumen pipeline to Asian markets.

The energy agreement signed on Nov. 27 includes a clear path to the construction of a one-million-plus barrel-per-day bitumen pipeline, with Indigenous co-ownership, that can ensure our province and country are no longer dependent on just one customer to buy our most valuable resource.

Indigenous co-ownership also provide millions in revenue to communities along the route of the project to the northwest coast, contributing toward long-lasting prosperity for their people.

The agreement also recognizes that we can increase oil and gas production while reducing our emissions.

The removal of the oil and gas emissions cap will allow our energy producers to grow and thrive again and the suspension of the federal net-zero power regulations in Alberta will open to doors to major AI data-centre investment.

It also means that Alberta will be a world leader in the development and implementation of emissions-reduction infrastructure — particularly in carbon capture utilization and storage.

The agreement will see Alberta work together with our federal partners and the Pathways companies to commence and complete the world’s largest carbon capture, utilization and storage infrastructure project.

This would make Alberta heavy oil the lowest intensity barrel on the market and displace millions of barrels of heavier-emitting fuels around the globe.

We’re sending a clear message to investors across the world: Alberta and Canada are leaders, not just in oil and gas, but in the innovation and technologies that are cutting per barrel emissions even as we ramp up production.

Where we are going — and where we intend to go with more frequency — is east, west, north and south, across oceans and around the globe. We have the energy other countries need, and will continue to need, for decades to come.

However, this agreement is just the first step in this journey. There is much hard work ahead of us. Trust must be built and earned in this partnership as we move through the next steps of this process.

But it’s very encouraging that Prime Minister Mark Carney has made it clear he is willing to work with Alberta’s government to accomplish our shared goal of making Canada an energy superpower.

That is something we have not seen from a Canadian prime minister in more than a decade.

Together, in good faith, Alberta and Ottawa have taken the first step towards making Canada a global energy superpower for benefit of all Canadians.

Danielle Smith is the Premier of Alberta

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