The Canada Pension Plan (CPP) fund holds a multibillion-dollar surplus that is not required to pay benefits, according to projections. This surplus could be redirected to other pressing national priorities.
Alberta urgently needs a new children's hospital. The Stollery Children's Hospital in Edmonton requires a new building, likely costing over $1 billion. Edmontonians are fundraising for it, yet public funds have been invested elsewhere.
Instead of building the hospital, the CPP invested in U.S. Urology Partners, a chain of clinics across the United States. The money for the children's hospital exists within the CPP fund, which holds excess premiums not needed for retiree benefits. The fund has a vast surplus totaling hundreds of billions of dollars, far exceeding projections.
Meanwhile, children in Alberta face delays for the hospital because federal and provincial governments, overseeing CPP investments, spent a billion dollars of that surplus on offshore wind farms in Europe. They also invested in Brazilian fitness clubs, Japanese golf courses, a Chinese company called Adopt-a-Cow, and $245 million in Goldman Sachs.
The Stollery is just one example; school boards and hospitals across Canada need billions for repairs and new buildings. Infrastructure and defence also require significant funding, but students, patients, commuters, and soldiers continue to cope with inadequate resources.
At the recommendation of the Alberta Next panel, chaired by Premier Danielle Smith, the provincial government may hold a referendum on exiting the CPP. If passed, this could dismantle the CPP as currently structured. Storm clouds are gathering for public sector pension funds in Canada.
Canadians face a choice: reform the CPP for everyone's benefit or risk its breakup.
Over the past 20 years, the CPP fund has grown into a global financial colossus holding nearly $800 billion, all belonging to Canadians. Last fiscal year, the fund recorded $57 billion in investment gains and an additional $22 billion from excess CPP premiums, totaling a $79 billion surplus in 12 months.
Seven years ago, the chief actuary's report concluded that $544 billion in the fund by 2025 would be sufficient to pay benefits until almost the end of this century. However, the fund has exceeded that, reaching $781 billion.
The conclusion is clear: there is a $237 billion surplus not needed for benefits, according to projections. This amount could be returned to Canadians through lower premiums, higher benefits, or dividends to governments for investment in wealth-enhancing priorities like schools, hospitals, and infrastructure.
Actuaries at the National Institute on Aging, a think-tank focused on elder care, have called for similar reforms, urging policymakers to stop overfunding the piggy bank and spend some of it.
