No Offense To Canadians Working in The PUBLIC Sector, but you’re Not Really Contributing to CPP: Trudeau Attacks Pitch to take Alberta out of CPP in Open Letter to Danielle Smith – October 18, 2023
In Canada, it’s a well-known fact that the province of Quebec, if it ever became an independent nation, would likely be BANKRUPT within a few years unless it made some serious structural changes to its fiscal policies.
Well, this is actually true with most Provinces in Canada; Quebec is often the target because of their larger population as well as their secession movement. But Quebec is not the only beneficiary of Canada’s TRANSFER payments scheme.
If you’re saying to yourself, why do transfer payments have to do with the PUBLIC sector? Well, in case you’re unaware, transfer payments go to FINANCING the public sectors of INSOLVENT provinces.
The Canada Pension Plan (CPP) retirement pension is a monthly, taxable benefit that replaces part of your income when you retire. People tend to forget that the CPP is a SOCIAL INSURANCE plan
The Canada Pension Plan (CPP) is a social insurance plan that is funded by the contributions of employees, employers and self-employed people as well as the revenue earned on CPP investments. The CPP covers virtually all employed and self-employed people in Canada, excluding Quebec, which operates its own comprehensive plan, the Quebec Pension Plan.
If you’re unaware, social insurance is a form of WELFARE, so the CPP is indeed part of the ever-growing Canadian WELFARE STATE, which equates to potentially useless public servants who do harm to the economy becoming the beneficiaries of the CPP.
Social insurance is a form of social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance.
Now, even though Quebec doesn’t contribute to the CPP via transfer payments, it’s actually a beneficiary of the contributors to the CPP. In Canada, when you’re a “Have Not” province or a bankrupt province, the Federal government can make up your provincial DEFICIT by REWARDING your province with money from the more PRUDENT fiscally responsible provinces like Alberta.
In macroeconomics and finance, a transfer payment is a redistribution of income and wealth by means of the government making a payment, without goods or services being received in return. These payments are considered to be non-exhaustive because they do not directly absorb resources or create output.
So these transfer payments, from Alberta’s private sector in actuality, go to paying PUBLIC SERVANTS in Quebec, who then use this money to fund the Quebec Pension Plan. So, people who don’t understand how Canada’s FEDERAL GOVERNMENT transfer payment system works have a hard time comprehending the numbers.
It makes me laugh whenever I read that an Albertan thinks they’re going to get short end of the stick if Albertans leave The Canada Pension Plan (CPP). Even Alberta’s PUBLIC SECTOR would be rewarded if they left the CPP.
I have to preface this by saying as long as Albertans maintain their CONSERVATIVE voting patterns and their conservative fiscal policies, then their Albertan pension plan would be safe,
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You have to remember that CPP is indeed an INSURANCE product, and if you’re unaware, insurance companies are profitable because not EVERYONE withdraws at the same time. Insurance is fractional reserve banking before fractional reserve banking.
Now, with PUBLIC INSURANCE, you have to worry about POLITICS. For example in British Colombia(BC), their Far Left Socialist NDP government went as far as to create Government auto insurance, so currently, BCers pay the most expensive auto insurance in the country because there’s no incentive for Insurance Corporation of British Columbia(ICBC) to operate efficiently, instead, it operates to the benefit of the politics of the day, which tends to lean on the side of INCREASING costs, to suit political agendas.
So I won’t be one to say that an Alberta Pension Plan would be perfect, it would only work if Albertans stuck with Conservatism and ran a sound, responsible FISCAL budget.
Canadian Equalization/Transfer Payments
The Equalization and Territorial Formula Financing programs provide unconditional transfers to the provinces and territories. Equalization enables less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces, at reasonably comparable levels of taxation.
Once you comprehend how Equalization works in Canada, and you comprehend that public servants are receiving their paychecks via TAXATION of the private sector, you start to comprehend that ONE pool of money is financing everything.
Sure, the Federal government can expand the money supply by BORROWING money, but this money doesn’t only cause consumer and labor prices to rise, but it also REWARDS bad fiscal policies, which, as I like to point out, creates STRUCTURAL problems that most people will not comprehend, as bad fiscal policies COMPOUND on each other.
Once you comprehend that the Public Sector has no money without the PRIVATE sector and you comprehend that Alberta has Canada’s largest PRIVATE sector, that’s when you start to get a clearer picture of how important Alberta is to the CPP.
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When you further understand that everyone doesn’t withdraw money from the CPP at the same time, that’s when you’ll comprehend why Alberta’s pension plan would likely be the most solvent pension plan in the Nation as long as voting patterns in Alberta remain the same, and the Federal government doesn’t impede on Provincial jurisdiction.
Interesting times ahead!