The economic activity from the operations of Canada’s public sector pension plans, as well as retirees spending their income from those plans, supports 877,100 jobs and 55,500 businesses, with $33.1 billion in annual wages and $21.4 billion in tax revenue, according to a new report.
The report, released by the Canadian Centre for Economic Analysis and commissioned by the Canadian Public Pension Leadership Council, found that every $10 of pension payments generates $16.70 of economic activity and makes a total contribution of $82 billion (3.6 per cent) to Canada’s economy annually.
The findings highlight how the $49 billion paid annually in pensions provides stability to regions across Canada and benefits provinces in different ways. Atlantic Canada has the highest percentage economic contribution, Ontario receives the biggest economic benefit per $10 of pension payment and Alberta has the highest proportion of jobs generated for people under age 35.
In total, 39 per cent of the 877,100 jobs supported go to people under age 35; 797,900 children live in households where income originates from public pension plan activity; rural communities benefit by 6.4 per cent more per capita than urban communities; and 72 per cent of the businesses supported employ fewer than 10 people.
“Canada’s public sector pension plans were set up to provide a stable retirement income for public servants, but this research speaks to a much broader impact,” said Derek Dobson, co-chair of the CPPLC and chief executive officer and plan manager at the Colleges of Applied Arts and Technology pension plan, in a press release. “Four million Canadians of different ages in all regions benefit directly or indirectly from the economic activity generated from pension operations and retirement spending. This speaks to the value our public pension plans provide as a unique asset for the country in supporting jobs, households and communities.”