Quote:
Originally Posted by PeteMoss
Is this right? Unemployed people aren't accruing benefits but you still need a bunch of people funding it to cover current obligations as people live longer. If everyone just stopped worked/paying CPP tomorrow - would they have the money to pay out everything owed to people who are owed today?
I think it would be right if you the boom/bust followed a forecasted pattern, but if the oil market dried up faster than expected - would that still work?
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The way to think about it is the bigger the ratio of people working to people who didn't contribute their fair share (retired folks who worked prior to the early 90s) the better off you are.
So yes, if everyone in Alberta stopped working that'd be a problem and the demographics would be better off in the rest of Canada, but that isn't realistic. The worst unemployment rate in the '80s recession was ~13%, and even covid peak when a huge percentage of the economy stopped was ~15%. If Alberta had its worst recession ever by about double and unemployment went to 25% and stayed there, our demographics would still be better than keeping with the current CPP demographic pool. So basically under any plausible scenario the demographics are better in Alberta than they are elsewhere.
And it isn't true that Alberta aging over time will be a problem, because the problem isn't old people, the problem is old people that didn't cover their own CPP, and that only includes time worked before the changes in the early '90s.
Anyway, this is all sort of academic, because the UCP and Aimco are basically untrustworthy weasels, so giving them control of our pension money is a terrible idea and we shouldn't do it. But all else equal we'd absolutely be better off.
Alberta's economy is diversifying away from oil and gas right now anyway, because in a post-Covid world work from home makes the population a lot more mobile. I just rented a condo to a couple from Vancouver. Both their (professional) jobs went permanent work from home, and the rent they're paying me is barely over half what their previous landlord was charging them for something similar. So they're way ahead by moving, and their jobs have nothing to do with oil and gas. Things like that repeated over and over make AB's economy less reliant on oil and gas over time as other sectors grow faster.