Is an Alberta Pension Plan Possible?
As the manufacture of inflation dreadfully increases its output, families are rightfully concerned about the security of their pensions. If Alberta achieved independence, what would happen to them? Is a provincial pension sustainable? Is it preferable to the federal plan we are shackled to now?
Yes! Very much so. However, before we understand why this is true, we must comprehend the workings of Canada’s current pension, the CPP.
Like most federal programs, Alberta disproportionately contributes to the CPP; we pay more than we get. For example, between 2008-2017, we shovelled a net $27.9 billion into the pension pool.* Granted, this is not necessarily a failure of the program itself; Alberta is an industrious province. We have a younger population, relatively high employment compared to other jurisdictions, and incomes reflecting our dedication to work, which means we don’t collect the excess of CPP like other provinces do.
Regarding the structure of CPP, it is very simple. CPP is predominately a “Pay-as-you-go-system.” Consumers of it do not receive most of their funds from an aggregated pool, but from the pockets of those presently contributing. If Alberta pays $2.9 billion into CPP one year, almost all those funds simply switch hands from the worker to the retiree.
You might ask why I chose the number “$3 billion” in my previous example. Understanding the mechanisms of federal pensions, now we can look at the price. The Fraser Institute calculated, “In 2017, Alberta contributed to 16.5% of the CPP while receiving only 10.6% for a net contribution of 2.9 billion dollars.”
Performing the arithmetic means the provinces (except Quebec) congregated $49 billion to the CPP. If Alberta floated 16.5% and received 10.6%, we paid $8 billion and received $5.2 billion.
Instantly our question, “Is an Alberta Pension sustainable?” is answered.
More than that, Fairness Alberta calculated another six billion dollars per year flows directly from our province into the reservoir of other provinces harvested for their benefit!** If sufficient funding for an Alberta Pension is a concern, or if its sustainability is concerned, it need not be.
Is an Alberta Pension desirable? Absolutely. Presently, the CPP contribution rate is 10.2%. To receive the same pension benefits we do now, an independent Albertan would enjoy a contribution rate as low as 5.85%. Independent, we are free to chart our own course no longer navigated by Ottawa. Instead of being crushed by the excessive weights of eastern bureaucracy, an independent and resilient Alberta, perhaps for the first time in its history, will take off its economic restraints, and rise.
*Unless otherwise stated, all facts, figures, and data has been cited from the Fraser Institute’s Albertans Make Disproportionate Contributions to National Programs available at:
**See Fairness Alberta’s figures here: https://fairnessalberta.ca/equalization/