Why not Alberta?
Provinces have the constitutional right to opt out of the Canadian Pension Plan to create their own pension plans.
For years, Alberta has considered the possibility of creating a made-in-Alberta provincial pension plan to replace the Canada Pension Plan (CPP). The creation of an Alberta Pension Plan (APP) is permitted under Canadian law and the mechanism for creating a fully autonomous pension plan is already laid out in the Constitution of Canada. An APP also has the potential to be fairer for Albertans, providing them with options for a pension plan that could either offer lower premiums for the same level of benefits, or a combination of better benefits and lower premiums.
Supporters of an APP often point to Quebec as a model for a provincial pension plan. Both the modern-day CPP and the Quebec Pension Plan were established simultaneously in 1966. In the interest of legislative fairness, the CPP permits provinces to likewise opt out of if they develop a contributory program that provides similar retirement and supplementary benefits.
“Establishing a provincial pension plan such as the APP requires some initial work on the part of the province, but once a pension plan has been designed to replace the CPP, there are no other constitutional questions,” says constitutional lawyer Brendan Miller. “There’s no need to negotiate with other provinces or seek their permission to withdraw, such as there would be to change the federal CPP regime. Alberta may leave the CPP at its sole discretion so long as Alberta creates its own comparable pension plan provincially. It would then be up to the remaining provinces to make up the shortfall created by Alberta’s withdrawal from CPP”.
Quebec has successfully managed the QPP within a federal framework for more than half a century, stressing the unique goals of the province and the needs of its citizens.
Albertans have the potential to do better than both the CPP and QPP because of simple demographic realties. The Alberta population skews younger — a median age of 37, compared to a national median of almost 41. Albertans historically earn higher incomes — $70,300 in after tax dollars per family in 2017, versus less than $60,000 for Canada. Within the CPP, the pension contributions of younger Albertans vastly outnumber the pension benefits enjoyed by their older counterparts. According to calculations by researchers from the Fraser Institute published in 2019, the total net contribution from Alberta workers to the CPP was $27.9 billion for the period from 2008 to 2017. ...
Jack Mintz, the president’s fellow at the University of Calgary’s School of Public Policy, notes that the transition between CPP and APP could be as simple as declaring that all future pension contributions would go to an APP.
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