Alberta
Potential investment manager for an Alberta pension plan—here are the facts
From the Fraser Institute
As discussions around Alberta’s potential withdrawal from the Canada Pension Plan (CPP) continue, commentators have bombarded Albertans (and Canadians more generally) with sometimes misleading rhetoric, which can undermine the public’s understanding of this key issue. Albertans—and Canadians broadly—need facts to make well-informed decisions.
One key issue has been the potential investment manager for an Alberta pension plan. Specifically, commentators have implied that by leaving the CPP, Albertans retirement funds would no longer be managed by the Canada Pension Plan Investment Board (CPPIB) but rather by the Alberta Investment Management Corporation (AIMCo), which manages several public funds and pensions in the province.
This is not necessarily the case. The province has the option to retain the CPPIB as its investment manager, contract with AIMCo, create a new provider, or contract with the private sector. Put simply, an independent Albertan pension plan has options other than contracting with AIMCo.
But for argument’s sake, let’s assume AIMCo was chosen as the investment manager for an Alberta pension plan. There’s quite a bit of confusion regarding AIMCo that should be clarified. Perhaps most commonly, critics of AIMCo emphasize that the CPPIB has averaged 10 per cent annual returns over the past decade, higher than AIMCo’s 7.2 per cent.
While true, the CPPIB rate of return is distinct from the rate of return earned by contributors to the CPP. Put differently, an individual’s rate of return is not the same as the fund’s rate of return because of the way the CPP was originally designed. Some of the commentary written on this issue has implied that the lower rates of return at AIMCo would influence the benefits received by Alberta retirees. In fact, the retirement benefits Canadians receive from the CPP, and from a comparable Alberta pension plan, are based on several unrelated factors including how many years they’ve worked, their annual contributions and the age they retire. This is key since the CPP and a potential Alberta pension plan are largely based on current workers paying for current retirees, or what’s known as a pay-as-you-go system. Estimates suggest Canadian workers born in 1993 or later can expect a real rate of return of just 2.5 per cent from the CPP.
Given the pay-as-you-go nature of the plan, the key for the CPP, and one assumes for an independent Alberta pension plan, is that the fund earns a rate of return that allows for sustainable payments to retirees over time. The current required rate of return for the CPPIB is 6.0 per cent, which both it and AIMCo exceed.
Moreover, AIMCo, unlike the CPPIB, is constrained by the investment policies of each individual pension fund that it manages. Indeed, unlike the CPPIB, AIMCo is responsible for managing the funds of numerous pension plans, each with their own investment objectives, risk tolerances and asset mixes AIMCo must follow.
For instance, the Management Employees Pension Plan, one of AIMCo’s largest pension funds, requires that 20 per cent to 45 per cent of the market value of the plan’s assets be invested in “inflation sensitive” investments, which include real estate, renewable resources and other assets that may have lower returns compared to alternatives such as investments in private equity. These constraints can limit AIMCo’s overall rate of return, while the CPPIB, unencumbered by the investment policies of other pension funds, has the flexibility to invest according to its core objective, which is to maximize returns adjusted for risk. Put differently, Albertans could grant AIMCo the same flexibility—it all depends on the investment policy implemented if an Alberta pension plan were created.
Finally, opponents also argue that the CPPIB fund’s size (more than $575 billion) makes it superior to any potential provincial fund. Yet the evidence suggests that despite its size, the CPP is not a low-cost pension plan. In fact, according to an analysis by Philip Cross, former chief analyst at Statistics Canada, the CPP’s cost at 1.07 per cent of assets was higher than the other analyzed pension plans, which ranged from 0.34 per cent to 1.02 per cent. And the CPP’s costs have skyrocketed from $4 million in 2000 to 4.4. billion annually, largely due to an increase in staff and compensation. For perspective, the CPPIB had only five employees in 2000; by 2020 it employed nearly 2,000 people. And critically, these changes have not increased the fund’s net returns.
Ultimately, it will be up to Albertans to decide if they want to opt out of the CPP for an Alberta pension plan, but to make that decision, they must be armed with facts. That includes clarifying some misunderstanding on two potential investment managers—CPPIB and AIMCo.
A new program funded by the Sustainable Canadian Agricultural Partnership will accelerate expansion in Alberta greenhouses and vertical farms.
Albertans want to keep their hard-earned money in the province and support producers by choosing locally grown, high-quality produce. The new three-year, $10-milllion Growing Greenhouses program aims to stimulate industry growth and provide fresh fruit and vegetables to Albertans throughout the year.
“Everything our ministry does is about ensuring Albertans have secure access to safe, high-quality food. We are continually working to build resilience and sustainability into our food production systems, increase opportunities for producers and processors, create jobs and feed Albertans. This new program will fund technologies that increase food production and improve energy efficiency.”
“Through this investment, we’re supporting Alberta’s growers and ensuring Canadians have access to fresh, locally-grown fruits and vegetables on grocery shelves year-round. This program strengthens local communities, drives innovation, and creates new opportunities for agricultural entrepreneurs, reinforcing Canada’s food system and economy.”
The Growing Greenhouses program supports the controlled environment agriculture sector with new construction or expansion improvements to existing greenhouses and vertical farms that produce food at a commercial scale. It also aligns with Alberta’s Buy Local initiative launched this year as consumers will be able to purchase more local produce all year-round.
The program was created in alignment with the needs identified by the greenhouse sector, with a goal to reduce seasonal import reliance entering fall, which increases fruit and vegetable prices.
“This program is a game-changer for Alberta’s greenhouse sector. By investing in expansion and innovation, we can grow more fresh produce year-round, reduce reliance on imports, and strengthen food security for Albertans. Our growers are ready to meet the demand with sustainable, locally grown vegetables and fruits, and this support ensures we can do so while creating new jobs and opportunities in communities across the province. We are very grateful to the Governments of Canada and Alberta for this investment in our sector and for working collaboratively with us.”
Sustainable Canadian Agricultural Partnership (Sustainable CAP)
Sustainable CAP is a five-year, $3.5-billion investment by federal, provincial and territorial governments to strengthen competitiveness, innovation and resiliency in Canada’s agriculture, agri-food and agri-based products sector. This includes $1 billion in federal programs and activities and $2.5 billion that is cost-shared 60 per cent federally and 40 per cent provincially/territorially for programs that are designed and delivered by provinces and territories.
Quick facts
- Alberta’s greenhouse sector ranks fourth in Canada:
- 195 greenhouses produce $145 million in produce and 60 per cent of them operate year-round.
- Greenhouse food production is growing by 6.2 per cent annually.
- Alberta imports $349 million in fresh produce annually.
- The program supports sector growth by investing in renewable and efficient energy systems, advanced lighting systems, energy-saving construction, and automation and robotics systems.
Related information
Alberta
Alberta introducing three “all-season resort areas” to provide more summer activities in Alberta’s mountain parks
Three iconic ski resorts to become summer hiking, mountain biking, zip-lining destinations.
Castle, Fortress and Nakiska have been designated as Alberta’s first all-season resort areas, making it easier for people to stay and play year-round.
For decades, red tape has restricted these resorts to winter operations and limited the ability to make facility upgrades or simply maintain existing facilities. These resorts are central to Alberta’s outdoor heritage, inspiring generations of athletes and outdoor enthusiasts. They have hosted world-class events such as the 1988 Olympics and served as the backdrop for cinematic blockbusters like The Revenant and Jumanji: The Next Level. All-season resort area designations support the revitalization of iconic resorts while maintaining strong environmental protections.
All-season resort areas will offer a wider variety of affordable and accessible recreation experiences for families, outdoor enthusiasts and visitors. These designations simplify regulatory processes while maintaining Alberta’s high environmental standards.
“Our government is proud to champion former Premier Peter Lougheed’s vision for Alberta’s Rockies, ensuring future generations can continue to access and enjoy these beautiful areas. By helping revitalize Alberta’s legendary ski resorts, we are striking the right balance of economic growth, environmental stewardship and Indigenous opportunity.”
Environmental excellence remains a core requirement. All projects must meet Alberta’s existing environmental standards, including the Public Lands Act, Water Act, and Environmental Protection and Enhancement Act, and will be subject to environmental assessment. Plans must address wildlife protection, water conservation, wildfire mitigation and sustainable visitor behaviour.
Since 2019, Alberta has expanded provincial parks and recreation areas by more than 300,000 hectares. As part of these designations, minor boundary adjustments ensure long-standing ski terrain is placed under the appropriate regulator, affecting less than 0.03 per cent of Alberta’s parks system.
“All-season destinations are all about serving community and building community. The new all-season policy will bring both social and economic opportunities to Alberta.”
Over the next decade, these three all-season resort areas have the potential to create 24,000 new jobs, $3.6 billion in GDP, and $4 billion in visitor spending. All-season resort developers and operators will be encouraged to partner with local businesses and use locally sourced materials, workforce talent, suppliers and service providers.
“Alberta’s outdoor recreation and resort potential was held back for decades by an unworkable land-use framework, even as our population grew. The new all-season resort regulations will now help catalyze responsible, year-round, nature-based development that draws new rural investment and strengthens Alberta’s culture of stewardship through lived connections with the land.”
All-season resorts present the opportunity to further support Indigenous economic participation, leadership and cultural inclusion in Alberta’s visitor economy. Alberta’s government is committed to continuing meaningful engagement with Indigenous communities, including ensuring that Treaty rights and traditional practices are respected.
To foster trust, transparency and collaboration in the development and management of all-season resorts, Indigenous groups were formally consulted by Alberta’s government as part of designation evaluations. Prospective project proponents must undertake consultations in accordance with Government of Alberta consultation policies and guidelines.
“Alberta’s first all-season resort areas mark an important step forward, and we are encouraged by the ongoing engagement between our Nations and proponents. When development respects our land and is built on true partnership with our communities, it creates meaningful opportunities for Indigenous Peoples, supporting economic growth, strengthening leadership and sharing our culture with visitors.”
“We look forward to working with the province to make sure that Treaty rights are upheld, protect the land and maintain open dialogue with our communities as these resorts move forward, ensuring Indigenous Peoples play a leading role in shaping Alberta’s visitor economy for generations to come.”
“The All-Seasons Resort Act presents a significant opportunity for meaningful Indigenous economic participation in the tourism sector. By capitalizing on this potential, Indigenous tourism can propel Alberta’s tourism sector to become a national leader and serve as a tangible tool for economic reconciliation, including job creation, language revitalization and cultural pride.”
Alberta’s government has created a clear regulatory pathway for all-season resorts. Designation is the first step in the regulatory process. Prospective project proponents can now begin Indigenous consultation, public engagement and proposal submissions to the regulator. Each proposal will be carefully reviewed by the regulator with input from subject matter experts and affected municipalities.
Revitalizing Alberta’s iconic ski resorts – STAKEHOLDER QUOTES
“Alberta’s outdoor recreation and resort potential was held back for decades by an unworkable land-use framework, even as our population grew. The new all-season resort regulations will now help catalyze responsible, year-round, nature-based development that draws new rural investment and strengthens Alberta’s culture of stewardship through lived connections with the land.”
“The All-Seasons Resort Act is exciting news for Alberta’s tourism sector. We welcome the clarity it gives to plan for the future of Kananaskis. We look forward to working with our partners and the province to support sustainable, year-round growth in a way that benefits our communities and protects what makes this place so special.”
“The All-Seasons Resort Act presents a significant opportunity for meaningful Indigenous economic participation in the tourism sector. By capitalizing on this potential, Indigenous tourism can propel Alberta’s tourism sector to become a national leader and serve as a tangible tool for economic reconciliation, including job creation, language revitalization and cultural pride.”
“All-season destinations are all about serving community and building community. The new all-season policy will bring both social and economic opportunities to Alberta.”
“Alberta’s first all-season resort areas mark an important step forward, and we are encouraged by the ongoing engagement between our Nations and proponents. When development respects our land and is built on true partnership with our communities, it creates meaningful opportunities for Indigenous Peoples, supporting economic growth, strengthening leadership and sharing our culture with visitors.”
“We look forward to working with the province to make sure that Treaty rights are upheld, protect the land and maintain open dialogue with our communities as these resorts move forward, ensuring Indigenous Peoples play a leading role in shaping Alberta’s visitor economy for generations to come.”
“Alberta Municipalities appreciates the provincial government’s commitment to municipal collaboration with the new All Season Resort Policy. Early consultation with municipalities results in stronger partnerships and better regional decisions that benefit Albertans.”
“AIOC welcomes the Government of Alberta’s leadership in ensuring Indigenous Nations and groups are engaged early in all-season tourism development. That approach supports reconciliation through responsible land stewardship, and long-term economic prosperity. With our expanded mandate, AIOC is ready to advance Indigenous-led tourism projects that drive investment and sustainable growth across the province.”
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