Report says full costs should be considered, but upside is evident
Albertans could significantly increase their retirement income without giving up a cent in CPP-equivalent benefits by moving to a provincial pension plan.
That’s the key takeaway from new research by the Fraser Institute, which shows that Alberta’s younger population, higher employment rate, and above-average incomes mean a lower contribution rate could fully fund an Alberta Pension Plan (APP) offering the same benefits as the CPP.
The report, Illustrating the Potential of an Alberta Pension Plan, is co-authored by Tegan Hill, director of Alberta policy at the non-partisan thinktank, whose previous research revealed that Albertans paid $53.6 billion more into CPP from 2018 to 2023 than they received in benefits, or more than six times that of British Columbia, the only other province to make a net contribution.
"Albertan workers have been helping to fund the retirement of Canadians from coast to coast for decades, and Canadians ought to know that without Alberta, the Canada Pension Plan would look much different," argues Hill.
The latest study finds that if Alberta introduced its own pension plan with a 5.85% contribution rate (a low-end estimate), median-income workers in the province could retire with a total income stream of $454,741 which is 71.6% higher than under the CPP, which delivers just $264,968 over the same retirement period. Even at a higher 8.21% contribution rate, the return would still be $329,640, or 24.4% more than the CPP.
Instead of sending nearly 10% of income to Ottawa, workers could invest the difference in private retirement accounts like RRSPs or TFSAs, letting compound returns amplify their retirement nest egg.
For example, someone earning the provincial median income ($53,061 in 2025) could accumulate over $125,000 in private savings by retirement if the APP’s rate were 5.85%, on top of standard pension benefits.
“While the full costs and benefits of a provincial pension plan must be considered, it’s clear that Albertans could benefit from higher retirement payments under a provincial pension plan, compared to the CPP,” concluded Hill.
The issue of a APP is part of the wider discussion about potential separation of Alberta, which was addressed recently by Scott Starratt, investment advisor and portfolio manager at Starratt Wealth Management of Canaccord Genuity based in Calgary. He shared with WP how his clients view the possibility of breaking away from Ottawa.
