CPP Investments head pitches Alberta business crowd on benefits of sticking with fund

As Alberta considers exiting the Canada Pension Plan, the head of CPP Investments visited Calgary on Tuesday to warn against losing its benefits.

CEO John Graham, who leads the professional organization that manages the Canada Pension Plan fund, made the pitch to a business crowd at a luncheon event in downtown Calgary.

Graham, who did not speak to reporters, said in his speech there is a strong business and public policy case for Albertans to stay with an established global investment fund with a proven track record.

"The CPP is truly widely admired around the world as a safe and stable pension plan that we can be confident will provide for us in retirement," Graham said.

"It's sustainable for at least the next 75 years, meaning future generations of Canadians can count on it."

The Canada Pension Plan fund currently has over $576 billion in assets under management and has averaged a 10-year annualized return of 10 per cent over the past decade.

But under Premier Danielle Smith, Alberta is taking a look at a plan for the province to exit the Canada Pension Plan and set up its own provincial alternative.

The Alberta government says its workers have contributed an oversized share to the national fund and would be in line for big savings and payouts if it were to leave the CPP.

The province says it is owed $334 billion, more than half of all CPP assets, while the CPP Investment Board and economists have put the number more in line with Alberta's representative CPP population of 15 per cent.

Graham did not speak directly about the Alberta government on Tuesday or its pension plan proposal.

Instead, he asked Albertans to consider that as a large fund, the Canada Pension Plan offers the benefit of risk pooling and diversification, which helps it weather economic downturns and changing demographics.

He added the CPP is also portable, meaning Albertans can take their pension with them if they choose to retire out-of-province.

"In a world of constant uncertainty, Albertans need to protect their financial future," Graham said.

Continued investments in Alberta

Graham also talked up CPP Investments' track record of investing in Alberta-based oil and gas companies, and reassured business leaders in the room that the fund will continue to invest in them even as it also seeks to prepare for the energy transition by investing in renewables and alternative energy companies.

"We were one of the first global investors to state publicly that divesting of conventional energy investments is counter-productive to global decarbonization goals," Graham said.

He added that $6 billion of the CPP fund is currently invested in the oil and gas industry in Canada.

Deborah Yedlin, president of the Calgary Chamber of Commerce, told reporters at the event her organization is worried about the many uncertainties surrounding the Alberta government's pension plan proposal.

In particular, she said businesses are worried that a potential Alberta departure from the CPP could make it harder for Alberta companies to attract foreign investment and recruit employees from other parts of the country.

"We've heard from individuals in the business community that they're concerned about what the implications of this could be for the province. They need to attract capital, they need to attract labour," Yedlin said.

"Anything that compromises our unity as a country is going to affect our ability to attract investment."

Federal Finance Minister Chrystia Freeland has said if Alberta were to exit the Canada Pension Plan it would require a "complex and multi-year process" of negotiating international social security agreements to deal with contributors who work abroad.

Last month, federal Conservative Leader Pierre Poilievre encouraged Albertans to stay in the federal pension plan.

But he blamed Prime Minister Justin Trudeau for creating the conditions, through measures such as carbon pricing, that would push the province to consider other options.