A recent report by the Fraser Institute reveals that Albertans have contributed a substantially larger share to the Canada Pension Plan (CPP) than any other province, outpacing the amount they have received in benefits.
Alberta’s contribution to the CPP has been over six times greater than any other province in Canada.
Alberta’s Net Contribution to the CPP
From 1981 to 2022, Alberta has contributed a net total of $53.6 billion to the Canada Pension Plan. This stands in stark contrast to the benefits received by the province during the same period.
Alberta workers, on average, have paid 14.4% of the total CPP premiums, while the province’s retirees have only received 10.0% of the total payouts.
Comparison with Other Provinces
While British Columbia is the only other province that has contributed more to the CPP than it has received, Alberta’s contribution is six times larger than that of British Columbia.
Why Alberta’s Contribution is So High
Several factors contribute to Alberta’s disproportionate share of CPP premiums. These include:
- High employment rates in the province
- Above-average income levels
- A younger population
These elements have resulted in a significant amount of CPP premiums being paid by workers in Alberta compared to the benefits received by retirees.
The Impact of Alberta’s Contribution on the CPP
Tegan Hill, the director of Alberta policy at the Fraser Institute, emphasized that Albertan workers have played a crucial role in supporting the retirement funds of Canadians across the country. According to Hill, without Alberta’s contributions, the Canada Pension Plan would look quite different.
If Alberta were to withdraw from the CPP, the report suggests that:
- Workers in Alberta could still receive similar retirement benefits but at a lower cost.
- The remaining provinces, excluding Quebec, would likely face higher payroll taxes to maintain the plan.
Future Outlook for Alberta’s Contributions
Hill noted that given current demographic projections, immigration trends, and Alberta’s longstanding economic growth, the province’s workers will likely continue contributing more to the CPP than the retirees in Alberta will receive from it.
Alberta’s Contribution vs. Benefits
| Province | Total Contribution to CPP (1981-2022) | Percentage of Total CPP Premiums Paid by Workers | Percentage of Total CPP Benefits Received by Retirees |
|---|---|---|---|
| Alberta | $53.6 billion | 14.4% | 10.0% |
| British Columbia | Higher than Alberta but much lower | N/A | N/A |
Alberta’s significant contribution to the Canada Pension Plan has played a pivotal role in supporting the retirement benefits of Canadians across the nation. However, given the province’s high employment rates, higher incomes, and younger population, it is likely that Alberta will continue to contribute more to the plan than it receives in benefits.
If Alberta were to withdraw from the CPP, it could potentially reduce costs for its own workers while increasing the financial burden on other provinces.
FAQs
How much has Alberta contributed to the Canada Pension Plan (CPP)?
Alberta has contributed a total of $53.6 billion to the Canada Pension Plan between 1981 and 2022.
What percentage of CPP premiums are paid by Alberta workers?
Alberta workers pay 14.4% of the total CPP premiums.
What percentage of CPP benefits are received by Alberta retirees?
Alberta retirees receive only 10.0% of the total CPP benefits.
How does Alberta’s contribution compare to other provinces?
Alberta’s contribution is six times larger than that of British Columbia, which is the only other province to contribute more to the CPP than it has received.