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If Alberta decides to opt out of the Canada Pension Plan, then Ontario better be ready to feel the pain.
Exiting the CPP is one of the ideas being studied by a panel set up by Alberta Premier Jason Kenney as he seeks a “fair deal” for the province.
Part of the fallout of the recent federal election is a growing discontent in Alberta with Ottawa. That has manifested itself in a “Wexit” petition — calling for Alberta to separate from the rest of the country — as well as Kenney’s focus on addressing Western alienation.
In a video recently shared on Facebook, Kenney says he understands Alberta’s $40-billion share of a CPP total of $400 billion could be pulled out and control given to the Alberta Investment Management Corporation (AIMCo), which already manages about $100 billion for Albertan taxpayers.
A Fraser Institute study earlier this year found that Alberta workers represented 16.5 per cent of the total contributions to the CPP in 2017, while Alberta retirees consumed 10.6 per cent of CPP expenditures. Further, over the past decade, Albertans made a cumulative net contribution of $27.9 billion to the CPP, over and above what was required to pay Alberta seniors.
The study also shows that should Alberta opt out, the CPP contribution rate would have to increase to 10.6 per cent from 9.9 per cent for the other provinces. But Alberta’s standalone contribution rate could be as low as 5.85 per cent. The calculations are based on the CPP pre-expansion and the Office of the Superintendent of Financial Institution’s definition of sustainability.
Last week it was revealed that an internal report prepared by AIMCo also said Albertans would see “a substantial benefit” as their costs to contribute to a provincial plan would drop.
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See Also:
(1) Trudeau’s dividing Canadians, not Kenney
(2) Will Trudeau’s cabinet focus on unity issues?
(3) Storm clouds darken over Canada’s political landscape
(4) In shocking move, Alberta UCP axes commissioner investigating its leadership scandal
(5) Jason Kenney needs to play it cool to deal with Wexit heat
