Why the financial industry’s argument is weak
Because of my thousands of emails to politicians, my repeated pleas to Canadians to query their MP about the CPP’s surplus, Premier Smith’s demand for Alberta’s share of the fund and Lifeworks’ absurd estimate that Alberta deserves 53% of the fund, most MPs are very aware of the CPP’s giant surplus.
However, politicians must obey their leader and vote on any legislation as ordered, even if they disagree. Otherwise, they could be ejected from the party, face not being re-elected and miss the substantial pension MPs receive if they remain in power for at least six years. My MP, the principled Jane Philpott was ejected from the Liberal party for an ethical stand. She then lost as an independent in the next election. After receiving a ½ hour presentation on the CPP’s surplus and potential, Ms. Philpott stated in anger, “Disgraceful lobbyists.”
Slick lobbyists, consultants, and think-tank representatives are all paid handsomely by the financial industry to spread misinformation that favours the wealthy. It is possible they arrive with bags of convincing cash, either given to party leaders, party administration or MPs themselves. These purveyors of misinformation have plied naive politicians with convincing arguments that revealing the CPP’s surplus would cause severe economic disruption for millions of Canadians and the Canadian economy. Combined with complicit actuaries maintaining there is no surplus, politicians feel somewhat comfortable and justified as they ignore the CPP’s giant surplus.
However, because denying the surplus is depriving Canadians of hundreds of billions of deserved dollars, and more, the argument supplied by the financial industry and actuarial profession deserves intense scrutiny and debate. Consider the following.
Why is their argument not in the media?
The most newsworthy, impactful story in Canada is not being published by any publications in our mainstream media. The story could easily explain how the CPP’s surplus and potential could solve many of Canadians’ and Canada’s current financial problems? As demonstrated earlier, only the financial industry and actuarial profession would lose. Why are the pros and cons of CPP reform not debated frequently in our media?
Premier Smith hired Lifeworks, Canada’s largest actuarial firm to estimate Alberta’s share of the fund. They stated Alberta deserves an absurd 53% of the fund. Then our media portrayed Premier Smith, not Lifeworks, as un-Canadian, uncooperative and unhinged.
Because Premier Smith is the only senior politician who has defied this cover-up, she is arguably the most honest politician in Canada. Her use of referendums further proves she is interested in true democracy and the overall welfare of all Albertans.
Canada’s media, seemingly controlled by the financial industry, has one goal - protect the grotesque profits of the financial industry. To avoid suspicion, it appears they remain very unbiased on all issues that will not negatively impact the profits of the financial industry. However, because the threat of the CPP’s surplus being revealed surfaced in Alberta, the media became a misinformation machine that would make FOX NEWS proud.
Why are our politicians not saying to the financial industry and their slick lobbyists,
"If releasing information about the CPP’s surplus would be so harmful, why not present your arguments publicly so Canadians can hear both sides, weigh the evidence, and decide for themselves? That is how democracy is supposed to work."
The financial industry’s share of corporate profit is almost double the comparable share in the US and Europe
Canada’s financial industry now collects 47% of all corporate profits. In the US, the comparable share is 25-30%. In Europe, the comparable share is roughly 25%. If Canada’s 47% share were reduced, it would not create economic disruption. It would merely move Canada closer to normal international levels.
In numerous other industries, layoffs are decimating struggling Canadians
Millions of Canadians have been, or will be, victims of devastating job loss. Consider the impact of artificial intelligence, robots, ATMs, online shopping, self-checkouts, self-driving taxis, self-driving trucks, and tariffs. Even graduates in IT programs cannot find employment because AI can write junior programs in ten seconds. These developments have resulted in, or will result in, unemployment, lost income, retraining, reduced self-worth and prolonged suffering for millions of Canadians. Why should a handful of millionaire executives in the financial industry be protected from a slight decline in income while millions of low-income Canadians are unprotected? In December 2026, an estimated 15,000 bank executives received a bonus averaging $1.8 million each.
How impactful will CPP reform be?
The benefits of CPP reform for 99% of Canadians would be in the hundreds of billions of dollars, and considerable reassurance that they will not retire in poverty. Meanwhile, the actual losses for the financial industry would be insignificant. For example, presume one million younger Canadians stop investing $10,000 with the financial industry this year, because they have confidence that their CPP contributions are on track to giving them a $100,000 CPP pension, in today’s dollars. This means the decrease in investment with the financial industry would be $10 billion (1,000,000 Canadians * $10,000 invested). The investment fee lost, at a typical 1% rate, would be $100 million. Profit on investment fee revenue has been estimated at 30%. The resultant $30 million decline in profit would represent only roughly 0.015% (.00015) of the industry’s annual profits of roughly $200 billion.
Moreover, because younger Canadians are computer savvy, they would more likely invest their extra earnings using ETF’s with their fee of roughly 0.4% per year, not mutual funds with their fee of roughly 2% per year. Finally, many invest with companies that charge no fee for trading like Questrade. And banks only charge $10 or less per stock trade.
The financial industry will still retain the lion’s share of investments. Those millions of senior Canadians who have already received, or will receive, inheritances in the millions of dollars will still need to invest their millions with the financial industry. To summarize, even with this recommended CPP reform, the financial industry would still be asked to invest trillions of dollars for millions of wealthier Canadians.
The industry’s fear of Voluntary Contributions to CPP Investments would also have a limited impact. If Canadians received the probable 10% return that CPP Investments would give them, instead of the probable 5% that the financial industry would give them, they would have over three times the profit over 40 years. However, because CPP Investments cannot easily give substantial additional contributions their historical return of 10%, there would need to be a maximum investment of, for example, $1,000 per Canadian per year. Because of the power of compound interest, a 25-year-old would likely have $540,000 by age 65 if he invested $1,000 per year with CPP Investments. With the financial industry, reasonably presuming a 5% return, he would only have $160,000.
This $1,000-per-year-maximum policy would help reduce mounting income inequality in Canada. Every Canadian would be given the same opportunity. For low-income Canadians they might receive a 10% return on all their investments. For high-income Canadians only a fraction of their portfolio would enjoy a 10% return.
If CPP Investments were suddenly ordered to distribute $200 billion from its mushrooming surplus, it would not be simple or profitable. Ideally, the CPP could gradually distribute $200 billion while somewhat replacing that $200 billion with voluntary contributions, as much as $20 billion per year. CPP Investments would obviously shed the less profitable investments and keep the more profitable ones, possibly resulting in increased returns.
Life insurance purchases would decline
If young Canadians learned that they are on track to receive a $100,000 CPP pension in today’s dollars, many would also learn of the CPP’s survivors’ pension. If over 65, survivors would receive 60% of their partner’s pension, as much as $60,000 per year for life, indexed. If under 65, survivors receive 37.5% of their partner’s pension, indexed.
To receive a $60,000 per year indexed income for life, life insurance companies would charge several million dollars in premiums.
While Canadians would enjoy considerable security for their survivor on their passing, at no cost, the life insurance industry would experience a considerable reduction in purchases of life insurance. An estimated 100,000 Canadians work in the life insurance industry. The industry might experience a gradual employment decline as younger Canadians recognize the power of the CPP’s survivor pension. Attrition would absorb some of the reduction. A 50,000 decline, for example, is small when compared to the millions of Canadians who have been replaced by robots, ATMs, online travel booking, self-checkout, online shopping and more. It should be noted that these advancements were implemented to reduce costs for the associated companies, which had no choice. Notifying Canadians that the purchase of life insurance is no longer necessary would be implemented to reduce costs for millions of Canadians, not companies.
The prospect of a considerable decline in the life insurance industry helps explain why the positive news of the CPP’s $500 billion surplus, and potential, has been suppressed.
Contributions to other pension plans would decline
If the CPP can eventually provide a $100,000 pension in today’s dollars, why would most Canadians contribute to any other pension fund? In 2026, aside from the CPP, pension funds hold $3.2 trillion from Canadians’ contributions and investment returns. These funds are monitored by numerous actuaries and employ roughly 10,000 Canadians. Moreover, most of that $3.2 trillion is invested with the financial industry. Eventually, the CPP could hold fully fund all pensions.
Currently, roughly 20% Canadians, mostly public sector employees, contribute approximately 10% of their income to their non-CPP pension fund. It is matched by their employer. In the private sector, employers are typically matching employees’ contributions up to 5% of an employee’s income. This 10% of income is invested, either by the employer or the employees.
With the CPP the only pension fund in Canada, all of these contributions would likely become unnecessary. While thousands of employees in the financial sector would eventually lose their jobs, millions of Canadians would have as much as 10% more income available today. And employees would reduce costs considerably because their obligation to match contributions would disappear.
The benefits that no lobbyist would dare mention
A no-risk $200 billion CPP surplus distribution could deliver enormous benefits to ordinary Canadians. In each federal riding, Canadians would receive $10,000 each, roughly $760 million in total. This distribution would provide needed comfort to millions of Canadians because most households would use their $10,000, on average, for necessities, debt repayment, food, housing, repairs, local businesses and reduced anxiety.
Economically, here are the benefits of a $200 billion surplus distribution, $10,000, on average, to 20 million Canadians:
Increased GDP - $200 billion is 6% of GDP. Not all will be spent but the multiplier effect will increase spending;
Increased productivity as increased sales, after fixed expenses have been paid, provide profit at a gross margin rate;
Increased business profits;
Increased employment to service the increased demand from wealthier Canadians;
Increased charitable donations;
Reduced income inequality and poverty;
Reduced deficit, thanks to increased income tax and increased HST.
Additional benefits lobbyists also would never mention
Politicians could legislate a DC format for the CPP and permit voluntarily with CPP Investments. While 99% of Canadians would thrive financially, as explained here, Canada’s financial industry would eventually lose billions per year and employment for actuaries would plummet.
An pathetic argument from Finance Minister Freeland
Former Finance Minister Chrystia Freeland sent me a weak defence of her inaction. While admitting the CPP does have a substantial surplus, she argued that the CPP needs the surplus because baby boomers are retiring and living longer. However, actuaries have already accounted for this. She also argued that the surplus is needed in case investment returns are poor. That is precisely why standard pension practice maintains a 25% surplus cushion. A 200% surplus violates the principle of generational equity, resulting in many Canadians dying earlier than they should, with a lower quality of life. Soon after sending me her unconvincing email, Ms. Freeland, the author of PLUTOCRATS, resigned from politics, probably unable to stomach the hypocrisy and injustice that she was forced to endorse.
The United Kingdom has a Minister for Pensions. Where is ours?
Our Chief Actuary has denied the existence of the CPP’s $500 billion surplus. He is not audited by our Auditor General or the CRA. Our CPP has no Board of Governors, of which a majority of members should be contributors and pensioners like you and me. His peer review is suspect because revealing the CPP’s surplus could result in a major decline in employment for actuaries, as explained here.
The UK has a Minister for Pensions. He is not an actuary. Canada needs one because we have $4 trillion ($100,000 per Canadian) invested in pension funds, largely unpoliced. And the CPP needs a Board of Governors who would report annually to Canadians the status of, for most Canadians, 10% of their lifetime earnings and the legislative options like a DC format or voluntary contributions that are available.
