Put simply, Albertan workers have been helping fund the retirement of Canadians from coast to coast for decades, and without Alberta, the CPP would look much different.
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Amid the economic uncertainty fuelled by Trump’s trade war, it’s perhaps more important than ever to understand Alberta’s crucial role in the federation and its outsized contribution to programs such as the Canada Pension Plan (CPP).
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From 1981 to 2022, Albertans’ net contribution to the CPP — meaning the amount Albertans paid into the program over and above what retirees in Alberta received in CPP payments — was $53.6 billion. In 2022 (the latest year of available data), Albertans’ net contribution to the CPP was $3 billion.
During that same period (1981-2022), B.C. was the only other province where residents paid more into the CPP than retirees received in benefits — and Alberta’s contribution was six times greater than B.C.’s contribution. Put differently, residents in seven out of the nine provinces that participate in the CPP (Quebec has its own plan) receive more back in benefits than they contribute to the program. Albertans pay an outsized contribution to federal and national programs, including the CPP because of the province’s relatively high rates of employment, higher average incomes and younger population (i.e. more workers pay into the CPP and fewer retirees take from it).
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Put simply, Albertan workers have been helping fund the retirement of Canadians from coast to coast for decades, and without Alberta, the CPP would look much different.
How different?
If Alberta withdrew from the CPP and established its own standalone provincial pension plan, Alberta workers would receive the same retirement benefits but at a lower cost (i.e. lower CPP contribution rate deducted from our paycheques) than other Canadians, while the contribution rate — essentially the CPP tax rate — to fund the program would likely need to increase for the rest of the country to maintain the same benefits.
And given current demographic projections, immigration patterns and Alberta’s long history of leading the provinces in economic growth, Albertan workers will likely continue to pay more into the CPP than Albertan retirees get back from it.
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Therefore, considering Alberta’s crucial role in national programs, the next federal government — whoever that may be — should undo and prevent policies that negatively impact the province and Albertans’ ability to contribute to Canada. Think of Bill C-69 (which imposes complex, uncertain and onerous review requirements on major energy projects), Bill C-48 (which bans large oil tankers off B.C.’s northern coast and limits access to Asian markets), an arbitrary cap on oil and gas emissions, numerous other “net-zero” targets, and so on.
Canada faces serious economic challenges, including a trade war with the U.S. In times like this, it’s important to remember Alberta’s crucial role in the federation and the outsized contributions of Alberta workers to the well being of Canadians across the country.
Tegan Hill is director of Alberta policy at the Fraser Institute
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