How Alberta could bring prosperity to Canada
The following was sent as an email on December 20, 2023 to all Alberta MPs, all Alberta MPPs and the top ten bureaucrats in Alberta.
As a professor emeritus (Business), I have thoroughly studied the Canada Pension Plan (CPP) for seven years. It is likely that Premier Smith used my research to justify her request to have Alberta’s share of the CPP fund transferred to Alberta. This is because my disturbing findings, which have been emailed to thousands of influential Canadians, show that our CPP fund has such a large surplus that 17 million members of our CPP deserve a $10,000 surplus payment, each.
Similarly, The Alberta Pension Plan (APP) website has stated that, if Alberta’s share of the fund were transferred to Alberta, seniors would receive as much as a $10,000 surplus payment, each.
To further establish credibility, my research and advocacy led to low-income seniors now receiving $440 million more per year in GIS payments.
The following explains:
Why Premier Smith should be labeled a Canadian hero, not an unhinged rebel.
How and why Lifeworks has disgracefully abandoned Canada by claiming Alberta deserves 53% of the $576 billion CPP fund.
What Lifeworks should have reported and how to calculate Alberta’s true share of the fund.
Why a fund transfer would give Alberta $33 billion more than needed to fund all Albertans’ CPP future pension commitments.
A disastrous strategy that Alberta must avoid.
How to speed the fund transfer from an estimated ten years to one year.
Why Chrystia Freeland, Mark Carney and Pierre Poilievre all think our capitalist system is rigged to favour the super-rich.
Why our $224 billion CPP surplus is responsible for probably the biggest cover-up in Canadian history.
Why the financial industry would lose billions of dollars per year if CPP truth became known.
Why actuarial employment would plummet if CPP truth became known.
Why the Canadian media refuses to publish the most newsworthy story in years.
Why all federal politicians are irresponsibly silent regarding hugely beneficial legislation.
Why the participants in this cover-up are arguably guilty of genocide.
The first half of this email is Alberta-specific. The second half is Canada-wide and includes links, graphs, and quotes verifying almost all claims.
Here is a highly informative, impactful, and accurate story that will you never see in the Canadian media:
"Following standard pension practice, the CPP should distribute $170 billion of its $224 billion surplus to deserving Canadians, with no risk to future CPP pensions. The potential benefits are extensive, encompassing 17 million Canadians receiving $10,000 each, a 20% increase in business profits, a 3% GDP boost, heightened employment, increased charitable donations, reduced poverty, diminished income inequality, improved mental health, all with a $50 billion deficit reduction."
In seven years, not one politician, actuary, journalist, or economist has given one reason against bringing these considerable benefits to Canadians and Canada. Hundreds have been consulted.
Premier Smith understandably wants these benefits for Alberta. Alberta rightfully deserves roughly $86 billion from the CPP’s $576 billion fund. Only $53 billion is needed to fund all Albertans’ promised CPP pensions. The remaining $33 billion could be allocated to generous surplus payments for pensioners and substantial contribution reductions for all employees and their employers, who must match employee contributions. The other benefits described above could also be enjoyed by Albertans and Alberta.
Unfortunately, because the federal Liberals refuse to distribute the CPP’s surplus, Premier Smith has been forced to demand Alberta’s share of the fund be transferred to Alberta.
Any mainstream federal political party could secure a landslide majority by proposing a $10,000 CPP surplus payment to each of 17 million Canadians, along with the additional benefits outlined above. However, the evidence is convincing that the financial industry has influenced, aka bribed, federal politicians to remain silent on the CPP's surplus and its potential. Based on my interactions with all 334 MPs, it appears likely that this example statement was made to each party’s bagman:
"If you promise your MPs will never mention the CPP's surplus, I, as a representative of the financial industry, will contribute $50 million to your party, equivalent to just 0.04% of our annual profits. Your silence will save us many times $50 million."
My MP, the principled Jane Philpott, after a presentation on the CPP’s surplus, stated “Disgraceful lobbyists.” My two other MPs salivated, thinking how easy re-election would be if their party proposed a CPP surplus distribution.
Legally, corporations cannot donate to political parties. Only individuals can, to a maximum of $1,675 per year.
Why does the financial industry not want the news of the CPP’s surplus published?
If CPP Investments sustains its impressive 10.9% return of the last decade, which is highly likely, an average 25-year-old Canadian can expect a $100,000 CPP pension in 2023 dollars.
Meanwhile, the financial industry advises all Canadians to invest 15% of their annual earnings towards retirement. Why would any struggling young Canadian invest anything towards retirement if he knew a $100,000 CPP pension in 2023 dollars awaits him? Why not use the additional 15% to increase his, and his family’s, quality of life today? The financial industry stands to lose billions of dollars annually in investment fees if young Canadians learn about a probable huge CPP pension and decide to stop investing today.
The financial industry slipped up once and publicly stated that appropriate CPP legislation
“would undermine a lot of successful, legitimate, (retirement savings) products in the investment industry”.
Who should be undermined – millions of struggling Canadians or an industry that already corners 47% of all corporate profits?
With:
the financial industry earning 47% of all corporate profits in Canada, a whopping $125 billion per year,
CPP reform resulting in their loss of billions of profit dollars per year,
our media silent on the most newsworthy story in Canada in years,
our politicians mute on hugely beneficial legislation,
all actuaries denying an irrefutable $224 billion CPP surplus,
…the evidence is convincing that the financial industry has used their deep pockets to keep struggling Canadians and Canada from enjoying considerably increased benefits and needed prosperity.
Something is rotten in the state of Denmark Canada. Chrystia Freeland (PLUTOCRATS) and Mark Carney (VALUE(S)) have each authored books claiming our capitalist system is rigged to favour the super-rich. Pierre Poilievre has boldly declared, "Our system is broken," and “Fire the gatekeepers.” Political considerations probably prevent these financial experts from specifying details. Meanwhile, authorities on democracy in Canada claim bribery, involving billions of dollars, is widespread in Canadian politics. This cover-up of the CPP’s surplus is likely one of the areas these experts are referencing.
Why does the actuarial industry not want the news of the CPP’s surplus published?
If Canadians knew the CPP could give them as much as a $100,000 CPP pension in 2023 dollars, the need for any other pension funds, and hence actuaries, would plummet. This explains why actuaries are denying the surplus to protect their at-risk industry. Consider the following:
The CPP now has $224 billion more than our Chief Actuary specified is needed to fund all pensions for the next 75 years. Yet, in thousands of pages of his reports, he never mentions the word “surplus” and has stated to me “The CPP is not in surplus.” For perspective, a $224 billion surplus in Canada is analogous to a $2.24 trillion surplus in the US.
The ten top Canadian actuaries who I have consulted have all denied the surplus with vacuous arguments.
Possibly Canada’s top expert on pensions, Malcolm Hamilton, is associated with the C.D. Howe Institute. The institute will not reveal who funds them, but it is likely the financial industry. In 2018, Malcolm spent roughly 40 hours trying to convince me there is no CPP surplus, using absurd arguments.
One top actuary stated,
“Our Chief Actuary has invented measures that are easily manipulated so that actuaries can control the narrative and hide things at will…I must remain anonymous because I am not allowed to criticize my fellow actuaries.”
My seven years of research agree with this disheartening evaluation.
Lifeworks, one of Canada’s largest actuarial firms, has irresponsibly claimed Alberta deserves 53% of the CPP’s fund. This has further confused Canadians and helped unfairly portray Premier Smith as unhinged and untrustworthy. Instead, Premier Smith should be praised as Alberta’s hero. She is combatting this cover-up so that Albertans can receive an estimated additional $33 billion above what is needed for fund their CPP pensions. This $33 billion is Alberta’s estimated share of Canada’s $224 billion CPP surplus.
In 2000, the CRA compelled the Ryerson University (aka TMU) Pension Plan, which had an 18% surplus, to distribute their surplus. Retired and active professors, including me, received as much as $20,000 each.
Assuming CPP Investments achieves a 6% return in the future, the surplus is now approximately 80% above the required funding for all pensions over the next 75 years. However, forecasting with a probable 10.9% return, the true surplus approaches 300%. Please contrast this 300% with Ryerson University's 18% surplus.
Pension experts all agree. Every pension fund must have a Board of Governors, mostly composed of contributors and pensioners. Members question actuary’s reporting and distribute a surplus when it is over 25%, as legislation recommends. Even though the CPP holds 10% of the lifetime earnings of most Canadians, trillions of dollars, the CPP has no such Board of Governors, and is never appropriately audited by our CRA or our Auditor General.
In summary, our Chief Actuary operates without oversight. He has denied a $224 billion surplus that, if distributed, could lead to huge benefits for Canadians and Canada. It appears all actuaries have been coached to deny the CPP’s surplus. If Canadians knew the CPP could likely provide a 25-year-old with a $100,000 CPP pension, in 2023 dollars, actuarial employment and financial industry profits would plunge.
Adding to the complexity, journalists who advocate strongly for the publication of such stories may find themselves facing unemployment in short order. Additionally, various organizations with a mandate to assist the less fortunate remain conspicuously silent. Research suggests that the tentacles of the financial industry extend widely.
Alberta has two potential strategies at its disposal regarding the CPP. One could prove disastrous, while the other holds the promise of bringing near-instant prosperity not only to Alberta but to the entire nation.
A disastrous strategy – take Alberta’s share and let Aimco or another investor invest it.
CPP Investments will likely sustain its impressive 10.9% return. They recently proudly stated,
“Over the past decade, we have had the highest returns of any global pension fund. Period.”
This success will likely continue because they possess numerous advantages over other investors worldwide. For instance, their private equity portfolio, constituting one-third of the total portfolio, recently achieved an unprecedented 33.2% return in a single year.
With our CPP fund now valued at $576 billion. with 20 million members, the average member holds $28,800 in the fund. If Alberta were to manage it independently, the outcome could be disastrous. Consider this: assuming the Alberta Pension Plan (APP) achieves a 6% return (a likely optimistic scenario), investing $28,800 for ten years would yield $52,000. However, if the same amount were invested with CPP Investments for ten years, capitalizing on their likely 10.9% return, it would grow to $81,000—a $29,000 difference.
This stark contrast suggests that, in ten years, if Alberta pursued an independent investment strategy, all Albertans could potentially receive nothing, while the rest of Canadians could enjoy a surplus payment of $29,000. Then, most Albertans could be very angry with Premier Smith for costing them each $29,000.
It's disconcerting that the APP website fails to include such analyses, potentially giving a misleading impression. The website implies,
“For investing your CPP contributions, CPP Investments or Alberta investing themselves will likely each give Albertans the same fund value in ten years.”
Instead, the website should state for example,
“While we may administer Alberta’s share of the CPP fund, we would never take your contributions away from the best pension fund investor in the world – CPP Investments. They can likely give you a large surplus payment in ten years.”
Why did Brexit, which has been a disaster for Britain, happen? Preceding the Brexit referendum, citizens were deeply deceived by skilled Brexiteers with slick marketing and no scruples. Meanwhile, the Remainers did a poor job of educating citizens regarding the dangers of exiting the European Union.
Influential Albertans, please be sure your APP website gives Albertans the full picture of the pros and cons. And please be wary of self-interested actuaries and the financial industry who are acting to protect their at-risk industries at the multibillion-dollar expense and prosperity of all other Canadians.
The strategy to bring near-instant prosperity to both Alberta and the rest of Canada.
After Lifeworks’ disgraceful claim that Alberta deserves 53% of the CPP’s $576 billion fund, the Liberals have asked our Chief Actuary to determine how much Alberta should receive from the fund. Our Chief Actuary, because he is deceptive or because the Liberals, desperate for more votes, will request a shortchanging of Alberta, may claim Alberta deserves much less than what Alberta truly deserves. Then, because billions of dollars of Albertans’ money will be lost, Alberta will be obligated to do their own calculations. (Should they hire Lifeworks again?!) Finally, our Supreme Court will probably need to be involved to make a ruling on which estimate is appropriate. These time-consuming steps could take ten years before Alberta receives one penny of their appropriate share of our CPP fund.
Actuaries would be delighted with this delay, misinformation, and confusion. Actuaries are a close-knit group. With a possible 50% decline in industry employment looming, if one breaks rank, he will be ousted as a pariah. History shows actuaries will use every trick in the book to keep the CPP’s surplus concealed.
On behalf of 17 million Canadians, most struggling, instead of waiting ten years to receive your share of the fund, why not try the following strategy?
Tell Prime Minister Trudeau that you will reveal to the Alberta public the convincing evidence that the Liberals have abandoned 99% of Canadians by not distributing the CPP’s surplus. The APP website, for example, could state:
"Because CPP Investments is the best pension fund investor in the world, our CPP fund now has a $224 surplus. Adhering to standard pension practice, the CPP should now distribute $170 billion to deserving Canadians, with no risk to future CPP pensions. The potential benefits are vast, including 17 million Canadians receiving $10,000 each, a 20% increase in business profits, a 3% GDP boost, heightened employment, increased charitable donations, reduced poverty, diminished income inequality, improved mental health, all with a deficit reduction of $50 billion.
I asked Prime Minister Trudeau to bring these huge benefits to all of Canada, as well as Alberta, but he refused, giving no reason why. If you are curious, www.fixthecpp.ca gives convincing, disturbing evidence why. Instead of waiting many years to see your deserved surplus payment or contribution reduction, I suspect, if thousands of Albertans demand an explanation, Mr. Trudeau, with added pressure from your Alberta MP, will capitulate. I urge you to demand answers from both your MP and Mr. Trudeau on why they are not distributing the CPP’s surplus.”
Premier Smith, you could start by telling Mr. Trudeau this will be on your website unless he agrees to a Canada-wide CPP surplus distribution. If he still refuses, you can tell him you will be publishing convincing evidence that shows all MPs may have been bribed by the financial industry to remain silent on the CPP’s surplus so that the industry can continue to greedily collect 47% of all corporate profits in Canada, at the expense of 99% of Canadians. MPs may then demand capitulation especially because they can all be justifiably associated with bribery and genocide, as explained below.
This assertive approach is necessary when so much suffering can be eliminated through CPP legislation. Polite, political-circle dialogue needs to be replaced with straightforward, blunt claims, including accusations of succumbing to bribery. Such actions would force MPs to justify their silence on such a crucial issue for Canada's prosperity. This is hardball politics, but, fortunately for Canadians, Alberta and Premier Smith are not shrinking violets.
If there is some gentleman’s agreement in politics of “I won’t reveal your bribery agreements if you won’t reveal mine.”, it needs to be abandoned if democracy is to flourish. Canadian media, particularly our complicit CBC, needs to stop endorsing this cover-up and start being Canadians’ watchdog on everything, not just on what the financial industry or Prime Minister Trudeau wants covered.
The proper method of calculating Alberta’s share of the CPP’s $576 billion fund
All figures presented below are approximations used for illustrative purposes, remaining within 5% of their true values.
Every Canadian has a personal CPP account. The CPP knows, for example, in 2022, exactly how much, with employer matching, you contributed to the CPP. Your contributions receive a 4.4% return per year. Presume you turned 65 on January 1, 2023, and contributed the maximum to the CPP. This means you had roughly $260,000 in your personal CPP account on January 1. If you live in Alberta, this $260,000 should be transferred to the APP when a transfer of Alberta’s share occurs. The APP, using your $260,000 will then be responsible for paying your pension of $15,000 per year.
Your $260,000 fund would gradually deplete to zero by age 86, when the average Canadian passes on. Some will die earlier than 86 and the CPP will use the money remaining in their fund to pay those seniors who live longer than 86.
Pensions are proportional. If another Canadian who also turned 65 on Jan 1, earned half of what you earned each year, and hence contributed half what you contributed each year, his pension would be exactly half of your $15,000.
Consider a typical 30-year-old today who has contributed $25,000 lifetime to the CPP, making his personal fund worth roughly $35,000 today, thanks to the 4.4% return per year that the CPP gives us. This means the CPP or APP has an obligation to pay him a $4,000 pension in 2023 dollars when he turns 65. If a transfer from the CPP to the APP took place today, the APP would need his $35,000 to pay his deserved $4,000 pension.
Of course, after age 30, he would contribute to the APP. At age 65, he would receive a $4,000 pension from the $35,000 transfer payment and more pension income from his contributions to the APP after age 30.
Computers can take a snapshot of every Canadian’s personal CPP fund value today and total these 20 million values. It can also total the value of all Albertans’ personal funds. If, for example, the Alberta total is 15% of the grand total, Alberta deserves 15% of the fund so that they can appropriately fund the pension liability that now exists in every Albertan’s CPP account. And Canadians in other provinces can also have their deserved CPP pension appropriately funded.
The Lifeworks report accurately states that working Albertans are contributing substantially more to the CPP than retired Albertans receive. This means the average Albertan member of the CPP is considerably younger than the average non-Albertan. However, as shown above, a typical 30-year-old might have only $35,000 in his personal account, while a 65-year-old might have $260,000 in his personal account. This means that, if for example, 18% of CPP members are from Alberta, Alberta may only deserve, for example, 15% of the CPP’s fund.
The perception that, because Albertans now contribute more than they receive in pension payments, they deserve more of the fund is flawed. Nevertheless, if the fund were transferred today, Alberta would receive roughly $86 billion, $33 billion more than what is needed to fund all Albertans’ CPP pensions promised.
It should be mentioned that the CPP is a pay-as-you-go pension plan. This means that roughly 20% of a working Canadians’ contributions are invested while 80% are used to pay pensioners. This means the transfer amount for the two example Canadians above would be 20% of $260,000 and 20% of $35,000. The total transferred would still be roughly $86 billion.
How did Lifeworks arrive at Alberta deserving 53% of the fund? They found obscure legislation in the Canada Pension Plan Act that ignores this pay-as-you-go concept, even though all actuaries know the CPP is a pay-as-you-go fund. Their 53% figure is highly irresponsible. Moreover, thanks to the complicit media, instead of resulting in a discredit to Lifeworks and actuaries, this ridiculous 53% figure has unfairly been attributed to Premier Smith. This has resulted in her and Albertans being portrayed as unhinged, selfish non-Canadians.
The Lifeworks report should have commenced with the following:
“Section 113 of the Canada Pension Plan Act wrongly states that Alberta’s share of the fund is the total of all contributions Albertans have made to the fund. Because the CPP is a pay-as-you-go pension plan, roughly 80% of contributions are immediately used to pay pensioners. Using Section 113’s logic would result in Alberta receiving 53% of the fund and all of Canada deserving a total of roughly 900% of the fund.
Instead of this logic, Lifeworks will accurately calculate Alberta’s deserved share using logic that gives each province a share so that the total would equal the CPP fund’s current $576 billion value.” (The appropriate logic is described above.)
Lifeworks needs to be publicly chastised. As Premier Smith, an ex-journalist knows, our complicit media, putting profit ahead of integrity, will not divulge these details. While I will continue to send out hundreds of emails to influential Canadians, publishing much of the above on the APP website could lead to considerable progress towards all of Canada finally receiving huge, deserved benefits from our CPP’s gigantic surplus.
The above has been tailored to Albertans specifically. Below gives a more detailed Canada-wide description of this surplus cover-up, including verifying links, graphs, quotes from experts and convincing evidence.
Because I am only using email addresses available in the public domain, these details may not reach Premier Smith. If you think it is important that she be aware of the above, please forward this email to her and any other influential Albertans. Thank you.
Sincerely,
Ross Macnaughton, B.A.Sc., MBA
Professor emeritus
Ryerson University aka TMU
www.fixthecpp.ca
The email next contained the details found at www.fixthecpp.ca.