Huge benefits for Canada’s 99%, mostly struggling

Introduction

Over the past ten years, as a Professor Emeritus who taught The Mathematics of Finance, I have studied the Canada Pension Plan (CPP) on behalf of its 22 million contributors and beneficiaries. During this time I stumbled on disturbing details that raise serious questions about how the CPP is being managed and how its investment gains are being shared. The CPP is important. Most Canadians have contributed 10% of their lifetime earnings to the CPP, trillions of dollars. However, no one in Canada is overseeing this contribution on their behalf.

For the past 15 years, CPP Investments’ has been the best pension fund investor in the world, averaging a 10% return when only a 6% return is necessary to meet all pension commitments.

CPP Investments’ outstanding performance has created roughly $500 billion in additional wealth beyond earlier projections. Yet millions of Canadians struggling with rising costs of living have seen no benefit from these gains.

If the recommendations below were implemented, millions of floundering Canadians would enjoy a considerable, deserved improvement in their quality of life. However, the overwhelming evidence indicates the selfish interests of Canada’s wealthiest 1% have been favoured over the interests of the other 99%. On this crucial issue, democracy, freedom of press and actuarial science have all been replaced with a deception that is having a profound negative impact on millions of Canadians and our sputtering economy.   

The issue goes far beyond pensions. It affects:

• the disposable income available to younger Canadians,

• the financial security of seniors,

• the strength of Canada’s economy.

• Albertans’ desire to separate from Canada.

My interest in the CPP is also partly personal. The MacNaughton family has long been connected to the history of the Canada Pension Plan.

Because CPP Investments has been the best pension fund investor in the world for 15 years, our CPP fund now has a $500 billion surplus as shown here. Fifteen years ago, our Chief Actuary specified a 6% return is necessary for fund stability, resulting in a $366 fund value today. Because CPP Investments has averaged a 10% return for 15 years, our comparable CPP Fund’s value is $725 billion. With an ongoing 10% return, which is likely, the CPP fund only needs roughly $245 billion in the fund to meet all pension commitments. This means our CPP fund now has a $500 billion surplus, 200% above what is needed.

My father’s cousin, Charles MacNaughton, served as Treasurer of Ontario from 1958 to 1962. Representing Canada’s largest province at the time, he was substantially involved in the discussions that shaped the framework of the CPP in its early years.

His son, John MacNaughton—my second cousin—later played a major role in transforming how the CPP invests its funds. After the landmark pension reforms of 1997, John became the first President and CEO of the Canada Pension Plan Investment Board, now known as CPP Investments. Before those reforms, CPP contributions were invested mainly in fixed-income securities. Under his leadership, CPP Investments began investing globally in public equity, private equity, infrastructure, real estate, and more. Over the past fifteen years, this strategy has produced the strongest investment results of all the pension funds in the world.

The purpose of this website is simple: to present the evidence clearly and allow Canadians to judge for themselves.

A big discrepancy in income

With CPP reform, 99% of Canadians would win but Canada’s financial industry would lose

Canada’s financial industry corners 47% of all corporate profit in Canada but only contributes 7.4% to our GDP. For comparison, the US financial industry only collects 25-30% of all corporate profit. Europe’s average is 20-30%. 

The industry is awash in cash. In December 2025, the Globe and Mail reported that Canada’s big banks distributed $27.3 billion in bonuses. An estimated 15,000 bank employees received $1.8 million each on top of their salaries. 

Meanwhile, millions of Canadians are struggling.

• A recent study found that 43% of Canadians are within $200 of insolvency. On March 9, 2026, The Globe and Mail wrote that “Household debt in Canada as a percentage of GDP is 103 per cent, second-highest among 34 OECD countries.”

• Another study indicates “54% of Canadians currently have credit card debt, with 72% of Millennials (ages 29-44) carrying such debt.” The credit card interest rate is roughly 20%.

• Food bank usage has doubled since 2019.

• Ontario mortgage delinquency rates are up by 135.2 per cent.

Young Canadians are struggling with mental health. Greenshield research confirms this. 

“TORONTO, Nov. 19, 2025 /CNW/ - A new survey from GreenShield, Canada's only national non-profit health care and insurance organization, conducted in partnership with Mental Health Research Canada (MHRC), reveals that over 80% of Canadian youth are overwhelmed by stress and anxiety about their future. Economic pressures – including job insecurity and the rising cost of living – are key drivers.”

Millions of struggling Canadians could gain huge benefits from the CPP’s surplus and potential. If they were aware that the CPP now has a $500 billion surplus and CPP Investments will likely continue investing with a 10% return, they could benefit in three ways.

Benefit # 1 - Voluntary Contributions to CPP Investments

In 2011, when CPP Investments had averaged roughly 6% annual returns for several years, then–Finance Minister Jim Flaherty examined the possibility of allowing Canadians to make voluntary investments through CPP Investments. Documents obtained through Access to Information requests indicate that the financial industry strongly opposed the idea, arguing that many Canadians might shift their savings into CPP Investments if it offered reliable returns at relatively low cost.

The power of this idea becomes clearer when we consider the effect of compound interest. Albert Einstein is often quoted as saying, “Compound interest is the eighth wonder of the world.” Whether or not he actually said it, the mathematics behind the statement is undeniable.

Consider a simple example. Suppose a 25-year-old Canadian voluntarily invested $1,000 per year with CPP Investments. Over forty years, the total contribution would be $40,000.

If CPP Investments continued earning approximately 10% annually, similar to its average performance over the past fifteen years, that investment would grow to roughly $540,000 by age 65.

If that amount were converted into retirement income, it could generate approximately $54,000 per year equivalent to roughly $25,000 per year in today’s purchasing power.

If the same individual invested $1,000 per year through conventional financial products earning about 5% annually, that investment would grow to only about $160,000 by age 65.

That amount would produce an annual retirement income of roughly $3,600 in today’s dollars—14% of what investing with CPP Investments might give him.

Allowing Canadians the option to invest voluntarily alongside CPP Investments could therefore provide an additional pathway for long-term retirement savings—one that benefits from the scale, diversification, and professional management of one of the world’s largest pension funds.

If Canadians were allowed to make voluntary investments through CPP Investments, many would choose this option because of the fund’s long-term investment performance and relatively low operating costs. As a result, considerable savings that currently flow into traditional wealth-management products would shift toward a publicly managed investment vehicle like CPP Investments.

Such a change could have important implications for Canada’s financial sector, particularly for wealth-management businesses that earn substantial revenues from managing individual retirement savings.

Any voluntary investment program would likely require reasonable limits. CPP Investments is designed to manage the assets of the Canada Pension Plan, and absorbing extremely large additional inflows could make it more difficult to deploy capital efficiently. For that reason, policymakers might consider placing an annual cap on voluntary contributions—for example, allowing Canadians to invest up to $1,000 per year through CPP Investments. Because $1,000 per year is below the TFSA limit, the estimated $54,000 annual income in retirement could be withdrawn tax-free.

This legislation would help neutralize Canada’s growing income inequality. 

Overall, allowing voluntary contributions to CPP Investments could provide Canadians with an additional low-cost, long-term investment option while strengthening retirement savings for millions of households. However, the financial industry’s considerable profits would shrink.

Benefit #2 - Give Canadians’ CPP contributions CPP Investments’ likely 10% return

If CPP Investments continues to achieve investment returns near its long-term average of about 10%, the retirement benefits generated by Canadians’ contributions could be dramatically larger than what current projections imply.

Consider a typical example. A 25-year-old Canadian earning $60,000 per year in 2026 dollars is required to contribute $3,362 annually to the Canada Pension Plan. His employer contributes the same amount on his behalf, bringing the total annual contribution to $6,724.

Over a working career of roughly forty years, these contributions accumulate and are intended to fund the worker’s retirement pension.

The graph below compares two scenarios:

1. Scenario A: Contributions effectively grow at approximately 10% per year, reflecting the long-term investment performance of CPP Investments.

2. Scenario B: Contributions grow at approximately 4.75%, which reflects the effective return the CPP currently gives contributors.

The difference between these two scenarios is enormous.

Key assumptions used in the analysis

• A 2% annual inflation rate is assumed throughout the analysis.

• A pension of $230,000 per year in forty years would therefore be equivalent to roughly $104,000 in 2026 purchasing power.

• A pension of $55,000 per year in forty years would be equivalent to roughly $25,000 in 2026 purchasing power.

• Life expectancy is assumed to be age 86, consistent with actuarial mortality projections.

• Any remaining balance in the account at death would remain to support a possible surviving spouse, who would receive a pension equal to 60% of the partner’s pension up to the CPP maximum, consistent with current survivor benefit rules.

Conclusion

Under these assumptions, a middle-income young Canadian could receive a CPP pension equivalent to about $100,000 per year in 2026 dollars.

By comparison, the pension currently projected under existing CPP formulas is closer to $25,000 per year in today’s purchasing power.

In other words, the retirement income generated by the same contributions could be more than four times larger if contributions earned the full investment return achieved by the CPP fund.

Broader implications

If young Canadians believed that their CPP contributions could generate retirement income on this scale, it could significantly change how they plan their financial lives. Many might elect to:

• Stop investing the recommended 15% of their income towards retirement,

• Stop contributing to other pension plans (This would also eliminate a costly contribution-matching obligation for all employers.)

• Stop purchasing life insurance (The CPP pays a 60% survivor pension—worth ~$60,000 per year in 2026 dollars).

The financial industry would then see a reduction in revenue from investment management fees, pension fund products, and life insurance sales.

If our government notified young Canadians they will likely be eligible for a $100,000 CPP pension in 2026 dollars, the improvement in their mental health might be substantial. They could be annually notified regarding CPP Investments’ recent success and their probable pension based on various investment return scenarios.

If this recommendation were adopted, the CPP would become a Direct Contribution (DC) pension plan instead of a DB plan, it would become the safest, most profitable pension plan in Canada

With a DC plan, the plan member receives the return on his contributions that the investor achieves, not the 4.75% return the CPP now gives Canadians.

With most DC plans, this involves considerable risk because the investor could flounder. However, because of CPP Investments’ history of success and its many advantages over other investors, that risk is near-zero. Meanwhile, the upside of such a policy is the pensioner will likely receive four times the pension.

In the private sector, almost all companies have now phased out their DB plans and switched to a DC plan. 

Benefit # 3 - The CPP’s surplus - help for millions of Canadians who need immediate assistance

Recall that 43% of Canadians are within $200 of insolvency, 54% have credit card debt and the CPP has a 200% surplus. If our Chief Actuary followed standard pension practice and the principle of generational equity, he could, with no risk to future pensions, distribute some of the CPP’s $500 billion surplus. 

For example, a $200 billion distribution from the fund would provide roughly $10,000, on average, to about 20 million Canadians, most struggling.

Such a distribution would have have broad economic effects. Additional income in the hands of millions of households would increase spending throughout the economy, supporting improvements in:

• GDP growth

• productivity

• business profits

• employment

• poverty reduction

• charitable giving

• Canada’s mounting deficit.

Canada’s struggling young need and deserve these benefits

Younger generations face a wide range of challenges: high housing costs, rising rents, growing income inequality, climate concerns, and increasing financial stress.

Demographic trends also highlight the economic challenges facing younger generations. Since the mid-1970s, Canada’s fertility rate has declined significantly—from about 2.1 children per woman, the level needed to sustain population growth, to roughly 1.25 today. Many researchers attribute part of this decline to the rising cost of living, housing affordability challenges, mental health issues, and economic uncertainty for young families.

Policies that strengthen retirement security and improve financial stability could help address many of these pressures. To deprive Canada’s struggling youth of these multi-billion dollar benefits so that the executives in the financial industry can increase their millionaire wealth is criminal. However, legally, the perpetrators of this subtle cover-up probably enjoy complete protection.

Is there a reason against giving these benefits to Canadians? I have emailed these details to hundreds of journalists, economists and politicians. Not one gave a single argument against distributing the CPP’s surplus. 

A summary of the pros and cons of revealing the CPP’s $500 billion surplus

The benefits summarized in the left column would bring a huge improvement to the lives of millions of struggling Canadians and Canada’s anemic economy. On Sept. 11, 2024, Finance Minister Freeland defended her inaction on this crucial issue in an email to me. She stated:

“Consequently, the large build-up in the CPP Fund is necessary to pay for the promised level of benefits, in particular to the large baby boom generation.  

In addition, it is important to maintain a certain buffer in the CPP Fund to protect against sudden and unexpected negative shocks to the global economy, such as a collapse of oil prices, a financial crisis or the impact of a global pandemic on the world economy. “

Her response is sadly lacking. Firstly, actuaries have already planned for “our large baby boom generation.” Secondly, the pension fund surplus buffer “to protect against sudden and unexpected negative shocks to the global economy” is a 25% surplus. The CPP now has a 200% surplus.

This overzealous caution is absurd. It is akin to a multi-millionaire saying,

“I am only spending $5 for lunch at McDonald’s because my multimillion-dollar portfolio could plummet in value tomorrow. And my children and grandchildren, now going to food banks, will receive nothing until ten years after I die.”

Why aren’t these benefits reaching millions of struggling Canadians

Three powerful, influential industries would lose billions of dollars and lucrative employment if the news of the CPP’s surplus becomes known. The evidence, collected over ten years, can be found by clicking:

The Financial Industry

The Actuarial Profession

The Media Industry