Design assumption. Alberta would not be inheriting Canada’s administrative architecture. For costing purposes, this paper assumes an independent Alberta voluntarily continues Canada Pension Plan-equivalent, Old Age Security and Guaranteed Income Supplement payments, and finances all three through a single ring-fenced Alberta retirement-income system.
Contributions, transferred assets and investment income remain inside that system, and the model tests whether it can sustain the combined obligations. Nothing here implies that Old Age Security or the Guaranteed Income Supplement are today components of the Canada Pension Plan; they are not.
For this analysis, pension assets and liabilities are ring-fenced from general government revenue and expenditure for fiscal modelling purposes.
The retirement obligations Alberta would take on — Canada Pension Plan-equivalent benefits, Old Age Security and the Guaranteed Income Supplement — are handled here as one sealed system, paid by an Alberta Pension Plan and never out of general tax revenue. That is the steady state considered under this document.
Inside the transition window the plan holds no assets yet, and the Budget and Costing Report accordingly carries the part of the book that Canada's own export rules do not permit it to pay — the Guaranteed Income Supplement in full and Old Age Security for the short-residence cohort — as a payment to citizens met from cashflow. The two treatments describe the same obligation at different stages, not two different obligations.
| Pension item | Basis | Amount | Treatment |
|---|---|---|---|
| Annual retirement-income obligations | |||
| Canada Pension Plan-equivalent benefits | Current Alberta planning estimate | ~C$5.1B a year | Paid from the APP |
| Old Age Security | Current Alberta payments | C$6.28B a year | Paid from the APP |
| Guaranteed Income Supplement | Current Alberta payments | C$1.63B a year | Paid from the APP |
| Total obligations | ~C$13.0B a year | Paid entirely from the APP | |
| APP funding | |||
| Assumed asset transfer | Half the C$334B LifeWorks claim | C$167.0B | Ring-fenced in the APP |
| Annual investment return | C$167.0B at 4.0% real | C$6.7B a year | APP income only |
| Ongoing Alberta contributions | Current estimate [FI-CPP] | C$11.4B a year | APP income only |
| Total annual APP income | C$18.1B a year | APP only | |
| Surplus retained inside the APP | C$18.1B less C$13.0B | ~C$5.1B a year | Never enters general revenue |
C$ billions unless shown otherwise. Payment figures use the current Alberta planning book [BA]; the asset-transfer range uses [LW-23][CPPI-26][FI-CPP]. The 4.0 per cent real return is discussed below.
The book pays for itself from inside the pension wall. That is why the ledger in Part I carries nothing at all for retirement income.
The return assumption
This paper uses a 4.0 per cent real investment return.
For comparison, Norway's Government Pension Fund Global earned 4.3 per cent a year after inflation and management costs from 1998 to 2025, while Norway now uses a 3 per cent planning assumption [NBIM-26]. Four per cent sits between those two benchmarks.
Will the fund still be there when the population ages?
Balancing on the commencement of sovereignty is the easy part. The real test is whether the plan still works when today's forty-year-olds retire — and Alberta is getting older.
Alberta had roughly 760,000 residents aged 65 and over in 2026. Alberta Treasury Board and Finance projects that number to pass one million by 2034 and 1.2 million by 2043, with about one Albertan in five over 65 by 2051 [AB-POP]. The obligation roughly doubles.
Contributions grow too, but more slowly, because the working-age population grows more slowly than the retired one.
| 2026 | 2036 | 2046 | 2056 | 2066 | |
|---|---|---|---|---|---|
| Albertans aged 65 and over, millions | 0.76 | 1.01 | 1.26 | 1.41 | 1.55 |
| Annual obligations, C$B | 13.0 | 17.3 | 21.6 | 24.0 | 26.5 |
| Annual contributions, C$B | 11.4 | 14.0 | 17.0 | 19.8 | 23.0 |
| Cash shortfall the fund must cover, C$B | 1.6 | 3.3 | 4.6 | 4.3 | 3.6 |
Real 2026 dollars. Benefits are held flat in real terms per recipient, which is how the Canada Pension Plan, Old Age Security and the Guaranteed Income Supplement actually work once in payment: they are indexed to prices, not to wages. Contributions grow with the working-age population and with real wages at 1 per cent a year.
The demographic pressure is not a cliff. The gap between what the plan pays out and what it collects widens to about C$4.6 billion a year in the mid-2040s and then narrows again as the baby-boom cohort passes through and contributions keep growing. The fund has to cover that gap, and on these assumptions it does so out of investment income without touching capital.
Table 9 - Fund value in 2066 under different transfers and returns
C$ billions, real 2026 dollars.
| Asset transfer | 3.0% real | 4.0% real | 5.0% real | Return needed to survive to 2066 |
|---|---|---|---|---|
| C$100B - the CPP Investments view | 60 | 152 | 296 | 1.9% |
| C$167B - half the LifeWorks claim, used here | 279 | 474 | 767 | below zero |
| C$334B - the full LifeWorks claim | 824 | 1,275 | 1,943 | below zero |
"Below zero" means contributions and the transferred capital alone carry the book to 2066 even with no real investment return at all.
Under the assumptions used, all modelled scenarios remain solvent to 2066. Even on CPP Investments' own much smaller figure of about C$100 billion, the fund lasts to 2066 provided it earns roughly 2 per cent real — half what Norway has achieved. On the C$167 billion planning case the fund is larger in 2066 than it was on Day 1.
Where this could still go wrong
The table above assumes benefits stay flat in real terms per recipient, which is how the programmes work today.
The transfer is disputed and not in Alberta's gift. The 2023 LifeWorks analysis produced the C$334 billion claim; CPP Investments has argued for something closer to C$100 billion [LW-23]. This paper plans on half the LifeWorks figure, which is neither side's number.
There is a fallback, and it is affordable. If no transfer occurred on the assumed terms, Canada Pension Plan benefits remain portable from Canada under the Day 1 arrangement, and Alberta would pay the roughly C$2.13 billion of non-portable Old Age Security and Guaranteed Income Supplement from general revenue. That reduces the annual balance to about C$18 to C$28 billion. It does not overturn the conclusion.
Alberta's existing public-sector pension plans for teachers, public servants, local authorities, management and police stay exactly where they are: separate plans, provincial jurisdiction, own assets and liabilities. They are not folded into the APP and they never become general revenue.
