Hill: Another example of CPP Alberta’s huge contribution to Canada

Article content

Amid the economic uncertainty driven by Trump’s trade war, it may be more important than ever to understand Alberta’s key role in the federal government and its huge contribution to programs such as the Canadian Pension Program (CPP).

Article content

Article content

Recommended videos

Article content

From 1981 to 2022, Albertans net contributions to the CPP – meaning Albertans exceeds the amount Alberta receives in CPP payments for $53.6 billion. In 2022 (the latest year of available data), Alberta’s net contribution to CPP was $3 billion.

During the same period (1981-2022), BC was the only retiree who paid the CPP instead of the proceeds, while Alberta contributed six times as much as BC. In other words, residents of seven of the nine provinces participating in the CPP (Quebec has its own program) received more benefits than they contributed to the program. Alberta has made a huge contribution to federal and national programs including CPPs due to the relatively high employment rate, average income and young population in the province (i.e., more workers pay CPPs, while retirees get fewer retirees from it).

Article content

Article content

In short, Alberta workers have been helping Canadians retire from coast to coast for decades, and without Alberta, CPP would look very different.

What’s the difference?

If Alberta withdraws from the CPP and establishes its own independent provincial pension plan, workers in Alberta will receive the same retirement benefits, but at a lower cost (i.e., the CPP deducted from our salary is lower) than other Canadians, and the contribution rate of Canadians may increase the program to maintain the benefits in the country, and the contribution rate of the program may increase.

Given current population forecasts, immigration patterns, and Alberta’s long history of leading economic growth, Alberta workers may continue to pay more to the CPP than Alberta retirees recover from it.

Article content

Therefore, given Alberta’s critical role in the national program, the next federal government (whoever) should revoke and prevent policies that negatively affect the province and Alberta’s ability to contribute to Canada. Think of Bill C-69 (which imposes complex, uncertain and cumbersome review requirements on major energy projects), Bill C-48 (which bans large tankers near the northern coast of British Columbia and limits access to Asian markets), arbitrary limits on oil and gas launches, many other “net zero” targets, and so on.

Canada faces serious economic challenges, including a trade war with the United States in such an era, and it is important to remember Alberta’s key role in the federal and the huge contribution of Alberta workers to the well-being of Canadians nationwide.

Tegan Hill is a director of Alberta Policy at Fraser Institute

Article content