Every pension and benefit payment continues. That is the whole of the design, and it is the standard the Alberta Transition Plan sets: no person lawfully entitled to a transition-protected pension immediately before Day 1 should miss a scheduled payment because governments have not finished settling with each other.
Canada already pays pensions to people living outside Canada, and its own rules govern what it can export. On the planning case Canada continues to pay what those rules allow it to pay to people in Alberta, and Alberta pays the rest from cashflow. That split is not Alberta's to choose: some benefits are exportable under Canada's rules and some are not, and the Guaranteed Income Supplement in particular is not exportable at all. Where Canada continues to pay, a non-resident withholding tax applies until a tax treaty removes it, which is a timing exposure rather than a permanent charge.
What Alberta builds is not a benefits system. It is enough administration to make the correct payments to the correct people with accuracy and auditability and the least process that will serve — a registry, a payment capability and a contact point, using tools that already exist. The Alberta Pension Plan holds no assets inside the transition window, so nothing here assumes one. Forward to Freedom costs the steady state on the other side of that, where a funded Alberta Pension Plan meets the retirement obligations from its own assets rather than from general revenue; the two describe the same obligation at different stages. A single consolidated payments platform serving every benefit is a sensible long-term design and an unnecessary one for twenty-four months; it is recorded as an optimisation for the longer horizon rather than built now.
C$ millions, fiscal 2026-27 price base. A one-time cost, a recurring cost and a payment to a member of the public are different things and are never added together.
How the figure is built
C$35.0M a year of added running cost, C$2,132.5M a year of payouts to Alberta seniors, and C$164.4M one-time of which C$26.0M is capital. Canada's own rules for paying benefits to people outside Canada divide this domain, and they divide it unevenly.
The Guaranteed Income Supplement cannot be paid outside Canada at all, so Alberta meets all C$1,630.3M of it. Old Age Security can be exported only by those with twenty years of Canadian residence, so Alberta meets C$502.2M for the cohort who cannot. The remaining C$5,775.3M of Old Age Security, and the Canada Pension Plan in full, continue to be paid by Canada as they are to any other non-resident. Alberta pays 27 per cent of the pension book from cashflow and administers what it pays.
The lines
| C$M | ||
|---|---|---|
| Old Age Security programme principal | 6,277.5 | 652,436 beneficiaries. The March 2024 month of C$468.405M annualised and indexed 11.68% to the 2026-27 price base; it is not a 2024 actual |
| Guaranteed Income Supplement programme principal | 1,630.3 | 203,764 beneficiaries, income-tested. The March 2024 month of C$121.645M on the same annualisation and index |
| Total pension book | 7,907.7 | |
| GIS - not exportable, Alberta pays in full | 1,630.3 | Stops after six months outside Canada, without exception |
| OAS - short-residence cohort | 502.2 | The planning assumption is that 8 per cent of Alberta recipients hold under twenty years' residence and so lose the pension when Canada stops exporting it. The sensitivity runs 5 to 15 per cent, which is C$313.9M to C$941.6M, and the range is the honest width of the question: no government publishes the distribution of recipients by years of residence, so the share cannot be measured from any source. Alberta's high rate of in-migration argues the true share is at or above rather than below the assumption |
| Programme principal met by Alberta | 2,132.5 | |
| Full-book registry and reconciliation | 14.0 | 652,436 records maintained whether Canada pays them or not |
| GIS determination and annual redetermination | 11.0 | The expensive kind of administration |
| OAS short-residence payment operations | 4.0 | About 52,000 recipients |
| Contact centre and appeals | 6.0 | Standing capability across the full book |
| ADDED RUNNING COST, a year | 35.0 | |
| PAYOUTS TO THE PUBLIC, a year | 2,132.5 | Money Alberta seniors already receive. Not a cost of independence |
| Master beneficiary registry | 11.0 | Full book under Alberta control, operable without live federal access |
| GIS income determination and tax data interface | 6.0 | Annual redetermination for 203,764 |
| Payment channel and banking file | 4.0 | On the rails the province already runs for the Alberta Seniors Benefit and AISH |
| Case management, exceptions and contact centre technology | 5.0 | Configured, not built |
| Capital | 26.0 | |
| Beneficiary data acquisition and validation | 38.0 | The full 652,436-record book, not just the quarter Alberta pays |
| Bank validation and beneficiary confirmation campaign | 16.0 | Continuity depends on banking data more than on fund ownership |
| Payment rehearsal and parallel running | 12.0 | Three shadow cycles before Day 1 |
| Contact centre surge | 12.0 | 92 FTE-years over a 90-day surge |
| Recruitment and training | 9.0 | Sized to the part-book operation |
| Legal authority, regulations and emergency payment powers | 14.0 | Including authority to pay entitlements from Alberta funds pending settlement |
| Programme management and assurance | 16.0 | 24-month stand-up |
| Contingency at 15% | 21.4 | |
| ONE-TIME TOTAL | 164.4 |
The people
Complement: Sized to a part-book operation: 255,959 paid against a 652,436-record registry. This domain’s build is not divided into named post blocks, so the figure is stated whole rather than tabled.
Comparators
| Figure | ||
|---|---|---|
| Guaranteed Income Supplement outside Canada | not payable beyond six months | Old Age Security Act. No residence history overcomes it |
| Old Age Security outside Canada | twenty years' residence after age 18, else stops at six months | Old Age Security Act |
| Canada Pension Plan outside Canada | fully exportable, no residence test | An earned contributory entitlement |
| Alberta OAS per beneficiary | C$717.93 a month against a national C$713.54 | March 2024, computed from the monthly beneficiary counts and amounts Employment and Social Development Canada publishes by province: C$468,404,588 across 652,436 Alberta beneficiaries, against C$5,125,426,945 across 7,183,114 nationally. Both figures reproduce exactly. The comparison is weaker than it looks and is not used as evidence: Alberta is third lowest of the twelve provinces and territories on this measure, and clears the national average only because Ontario and British Columbia, together half of all beneficiaries, sit below it. Every Atlantic province, Quebec, Manitoba, Saskatchewan and the territories are above Alberta. On the March 2025 month the gap closes to C$0.72 |
| Share of Alberta recipients below twenty years' residence | not published anywhere | No source publishes the distribution of Old Age Security recipients by years of Canadian residence, or the count of partial pensions. The actuarial report, the departmental datasets and the census all lack it, and the department states in terms that residence years are not held in its database. The 8 per cent used here is a planning assumption with a stated range, not a measured share |
| Alberta Seniors Benefit | of the order of 160,000 to 195,000 monthly income-tested payments | Already operating in the province, on the same kind of system. The lower figure is the Alberta Seniors Benefit stream alone and the higher the wider seniors financial assistance envelope, and the range is the distance between the two definitions |
| Withholding on social security: statutory default 25%, reduced only by treaty | 25% statutory; 0% for the United States and United Kingdom; 15% for Bangladesh, Bulgaria, Cyprus, Senegal, Tanzania and Trinidad & Tobago; 18% for the Dominican Republic | CRA published rates. The reduced rate covers CPP, QPP and OAS, and recipients cease to be subject to the OAS recovery tax |
What these figures assume
- Canada treats an independent Alberta as it treats any other country for benefit payment purposes, applying its existing export rules rather than making a special arrangement in either direction.
- Eight per cent of Alberta Old Age Security recipients hold fewer than twenty years of Canadian residence after age 18. The sensitivity runs from five to fifteen per cent, being C$1,944.1M to C$2,571.9M of programme principal.
- A social security agreement with Canada would move part of the short-residence Old Age Security book back to Canada. Canada already credits foreign residence under such agreements, so the twenty-year test is not fixed for a country that has one. The planning case treats Alberta as an ordinary foreign country with no agreement, which is the conservative end; an agreement reduces what Alberta pays rather than increasing it.
- Benefit design does not change. Every recipient receives what they receive today, on the same eligibility rules and at the same rate.
- Existing Alberta capacity is configured rather than replaced - the Alberta Seniors Benefit, AISH, the health registry and Treasury Board payment infrastructure.
- The registry is built to the full 652,436-record book even though Alberta pays about 255,959 of them, so that a federal withdrawal is a volume problem rather than a capability problem.
- The Alberta Pension Plan holds no assets within the transition window and pays nothing. Its steady-state role begins only when a settlement completes.
- An interim tax treaty or continuity arrangement forms part of the negotiation package. The statutory default on benefits paid to a non-resident is 25 per cent, not 15: the reduced rates are treaty rates, and Canada's conventions run from nil for the United States and United Kingdom through 15 per cent for a group including Tanzania to 18 per cent for the Dominican Republic. The planning rate of 15 per cent therefore assumes Alberta obtains a treaty of that middle kind rather than no treaty at all. If no agreement is reached the statutory 25 per cent applies, which is the C$3,243.8M case shown as a contingency; a nil-rate treaty of the United States kind removes the charge entirely. Alberta negotiating no better terms than Tanzania is a conservative planning choice, not the default outcome
Contingency, recognised at C$0
Currency: if Alberta redenominates in the adversarial branch at Banking and Currency, pension income continuing to arrive from Canada in Canadian dollars depreciates against an economy pricing in United States dollars. This is a flow exposure that a deposit backstop does not reach and it falls on the group least able to absorb it.
The instrument is the same backstop adopted at Banking and Currency, on the same terms and measured against the same reference rate. It runs no longer than the establishment of the Alberta Pension Plan. On the C$12,975.3M a year Canada continues to pay, that is nothing at ten per cent or less, about C$649M a year at fifteen per cent and about C$1,298M a year at twenty. It is the better targeted of the two currency supports, because benefit income is bounded by the benefit structure itself - the seniors benefit is clawed back at higher incomes and the contributory maximum is fixed - so unlike deposits there is no long tail of large recipients and no cap is required.
Recognised at C$0.
Withholding: non-resident withholding on the C$12,975.3M Canada continues to pay: planning rate 15%, being the rate the CRA publishes for social security under Canada's conventions, at C$1,946.3M a year until an agreement lands. Nil under a negotiated exemption; C$3,243.8M only if no agreement is reached at all. Scenario 3, Canada refusing to pay or administer: C$5,775.3M principal plus C$30M administration.
Veterans: a successor schedule of C$665M recurring, C$125M one-time and a C$156M reserve is costed here and recognised at C$0. It is recognised at nil because the obligation is Canada's and nothing supports assuming it transfers.
Canada's own rule is that it does not depend on where the veteran lives: under the Veterans Health Care Regulations, Veterans Affairs Canada provides treatment benefits and services related to entitled conditions regardless of Canadian residency, and Canada already operates reciprocal veterans arrangements with the United States, Britain, Australia, New Zealand and South Africa.
An entitlement earned by service is not altered by the veteran's address, on the same principle that makes the Canada Pension Plan fully exportable with no residence test. The schedule is carried so the capability exists if it is ever required, not because a transfer is expected. All of the above recognised at C$0
Sources
- ESDC administrative data: 652,436 Alberta OAS and 203,764 GIS beneficiaries, March 2024; C$468.405M and C$121.645M paid in the month. The principals here annualise that month and index it by 11.68% to the 2026-27 price base used throughout this budget, so twelve times the monthly figure does not reproduce them and is not meant to.
- Old Age Security Act and Canada.ca guidance on benefits paid outside Canada.
- Canada Revenue Agency, rates for Part XIII non-resident withholding tax.
- Alberta Transition Plan supporting analysis, Pensions and Public Payments, Hard Truths and the Section 13 degraded-operations capability requirements.
