As inflation and economic uncertainty challenge Canadian families, Albertans are increasingly concerned about the security of their pensions. Could an Alberta Pension Plan (APP) offer a sustainable alternative to the Canada Pension Plan (CPP)? If Alberta pursued greater autonomy or independence, would a provincial pension be viable and preferable to the federal system?
The answer is yes. An Alberta Pension Plan is not only possible but could better serve Albertans. To understand why, let’s examine the CPP and Alberta’s role in it.
Alberta’s Disproportionate Contributions to CPP
Like many federal programs, the CPP relies heavily on Alberta’s contributions. Our province’s younger workforce, high employment rates, and strong incomes mean we pay more into the CPP than we receive. A 2023 Fraser Institute report estimated Alberta’s net contribution to CPP at $3.1 billion in 2021, reflecting a long-standing trend where Alberta funds benefits for other provinces. For example, in 2021, Alberta contributed 16.7% of CPP funds but received only 10.8% of benefits.
The CPP operates as a “pay-as-you-go” system, where current workers’ contributions directly fund retirees’ benefits, with minimal reliance on an investment pool. In 2021, Alberta’s $8.2 billion in contributions far exceeded the $5.1 billion in benefits received, a gap that highlights the potential for a standalone plan.
Is an Alberta Pension Plan Sustainable?
Absolutely. Alberta’s significant net contributions to CPP demonstrate that our province has the economic capacity to sustain its own pension plan. A 2023 report by Alberta Investment Management Corporation (AIMCo) estimated Alberta’s share of CPP assets at $334 billion, providing a strong foundation for an APP. Fairness Alberta notes that billions in federal transfers, including pension contributions, flow out of Alberta annually, benefiting other provinces. Redirecting these funds could create a robust, Alberta-focused pension system.
Why an Alberta Pension Plan is Desirable
The CPP’s combined employer-employee contribution rate is 11.9% in 2025, with an additional 8% for higher earners under recent enhancements. Studies, such as a 2019 Fraser Institute analysis, suggest an APP could deliver similar benefits at a lower rate – potentially as low as 6% – due to Alberta’s demographic and economic advantages. While economic volatility and an aging workforce pose challenges, an APP could be tailored to Alberta’s needs, free from federal constraints.
An independent or autonomous Alberta could design a pension plan that prioritizes local priorities, reducing the bureaucratic burden imposed by Ottawa. This flexibility could enhance retirement security and economic resilience, allowing Alberta to chart its own course.
Considerations and Next Steps
While an APP is feasible, transitioning from CPP would require careful planning. Alberta’s government has explored this option through consultations, with ongoing debates about costs, benefits, and public support. A referendum on sovereignty, as advocated by the Alberta Prosperity Project, could empower Alberta to negotiate control over pensions, ensuring our contributions serve our people first.
To learn more about the APP’s efforts, visit albertaprosperityproject.com.
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Sources:
Sources: Fraser Institute, “Albertans Make Disproportionate Contributions to National Programs” (2023), available at fraserinstitute.org; AIMCo, “Alberta Pension Plan Analysis” (2023); Fairness Alberta, fairnessalberta.ca.
https://www.aimco.ca/insights/2022-investment-return-exceeds-benchmark
https://www.aimco.ca/insights/aimco-and-psp-investments-commitment