As Alberta considers exiting the Canada Pension Plan, the head of the Canada Pension Plan Investment Board visited Calgary on Tuesday to warn against losing its benefits.
John Graham, chief executive officer of the CPPIB, made the pitch to a business crowd at a luncheon event. In his speech, he said there’s a strong business and public policy case for Albertans to stay with an established global investment fund with a proven track record.
“The CPP is truly widely admired around the world as a safe and stable pension plan that we can be confident will provide for us in retirement. It’s sustainable for at least the next 75 years, meaning future generations of Canadians can count on it.”
The CPP fund currently has more than $576 billion in assets under management and has averaged a 10-year annualized return of 10 per cent over the past decade.
But under Premier Danielle Smith, Alberta is taking a look at exiting the CPP and setting up its own provincial alternative. The Alberta government says its workers have contributed an oversized share to the national fund and would be in line for big savings and payouts if it were to leave the CPP. The province says it’s owed $334 billion, more than half of all CPP assets, while the CPPIB and economists have put the number more in line with Alberta’s representative CPP population of 15 per cent.
Graham didn’t speak directly about the Alberta government or its pension plan proposal. Instead, he asked Albertans to consider that, as a large fund, the CPP offers the benefit of risk pooling and diversification, which helps it weather economic downturns and changing demographics.
The CPP is also portable, he added, meaning Albertans can take their pension with them if they choose to retire out of province. “In a world of constant uncertainty, Albertans need to protect their financial future.”
Graham also talked up the CPPIB’s track record of investing in Alberta-based oil and gas companies and reassured the business leaders in the room that the fund will continue to invest in them — even as it also seeks to prepare for the energy transition by investing in renewables and alternative energy companies. He added $6 billion of the CPP fund is currently invested in the oil and gas industry in Canada.
If Alberta were to exit the CPP, Federal Finance Minister Chrystia Freeland has said it would require a “complex and multi-year process” of negotiating international social security agreements to deal with contributors who work abroad.