Alberta Pension Plan
Right now, almost every employed Albertan pays into the Canada Pension Plan. About 10% of your income goes into the plan, with employers also paying a share for each of their employees.
The money you pay today is supposed to be paid back to you when you retire.
However, as is the case with many federal programs, Albertans aren't getting a fair shake when it comes to their pensions.
In fact, Alberta is subsidizing retirees in other provinces, forcing up our contributions and transferring more wealth out of the province.
As Canada's youngest and most productive province, Albertans contribute disproportionately more to the Canada Pension Plan than other provinces.
Here are three factors which are driving this:
1. We have a young average population age.
Alberta's median population age is 37.1 years, nearly four years younger than the Canadian median population age of 40.8 years. That means we have more people of working age as compared to retirees.
2. We have higher incomes.
The median income in Alberta in 2018 was $72,700 as compared to Canada's $61.400. This means that Albertans are earning higher wages and making larger contributions to the Canada Pension Plan.
3. More Albertans work.
Canada's labour force participation rate - the percentage of Canadians who are either working or actively looking for work - is 65.9% (Spring 2019). Alberta's rate is nearly six percent higher at 71.8%. This means that a larger proportion of Albertans are generating economic output and generating incomes to pay into the Canada Pension Plan.
Taken together, these three things show that Albertans are, in fact, net financial contributors to the Canada Pension Plan.
This is in contrast to regions who are below the Canadian average in these three areas, such as Canada's Atlantic provinces.
Those regions are, in effect, being subsidized by Alberta when it comes to Canada Pension Plan payouts.
In 2017, the net transfer from Albertans to the rest of Canada for just their Canada Pension Plan contributions was $2.9 billion.
It also means that payroll taxes for the Canada Pension Plan must be higher in order to sustain the payouts to these older and less productive regions.
An Alberta Pension Plan would preserve Albertans' contributions solely for those living in our province.
Moreover, because our our younger age and higher productivity, an Alberta Pension Plan would be able to maintain the same level of pension payments to Alberta, but require lower premiums from Alberta workers.
Right now, the Alberta government is considering whether or not to move forward with an Alberta Pension Plan.
We believe that this is the right move for Albertans, and would protect Alberta from political shenanigans which might impact the Canada Pension Plan in the future.
The federal government in Ottawa, particularly under activist Liberal governments, has a track record of politically interfering in supposedly arms-length groups.
Both the SNC-Lavalin scandal and the Admiral Mark Norman affair prove that Ottawa isn't above meddling in independent processes for political reasons.
The current government has clearly indicated that its top priority, outside of the response to the Covid-19 pandemic, is the fight against climate change.
It is not inconceivable that as part of their anti-climate change agenda, the federal government would divest financial resources - including the Canada Pension Plan - from investing in Canada's oil and gas sector.
An Alberta Pension Plan would be free from Ottawa's political reach and would pursue investments which have Albertans' best interests.
To read more about an Alberta Pension Plan, please check out this submission to the Fair Deal Panel from the founder of ARC Financial Mac Van Wielingen here.
We believe that an Alberta Pension Plan is an achievable and responsible step towards securing Alberta's long-term economic prosperity.
It would give Alberta and Albertans more control over their futures and reduce the flow of Alberta dollars to the rest of Canada.
Alberta Blue Skies
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