Report Says CPP’s Expenses Running Three Times More Costly

This article was last updated on April 16, 2022

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A report issued by the Fraser Institute has concluded that the cost of running the Canada Pension Plan is actually three times higher than the figures quoted in its investment board statements. The report issued on Tuesday has come at a time of speculation on the adequacy of mandatory-contribution pension plan and a time when the Ontario government is eager to roll out its own province-wide plan.

The report issued by Fraser Institute’s report unveils that the costs associated with such plans can prove difficult to pinpoint. The report highlights that there are hundreds of millions of dollars in consultancy fees, federal government management and transaction fees that are not included in the Canada Pension Plan Investment Board (CPPIB) report on the 2012-13 fiscal year. The report’s author, Philip Cross, stressed that “contrary to claims of proponents of an expanded CPP, or provincial pension plan in Ontario, many of the costs of large, government-managed pension plans like CPP are hidden. A full examination of all costs shows that CPP is not as low-cost as they want you to believe.”

In addition to that, the report mentions in complete detail a number of expenses absent from previous CPPIB figures that would push the total operating expenses to about $2-billion, which is essentially completely different from the investment board’s published operating expenses of $490-million for the 2012-13 fiscal year. It was highlighted that the disparities in the previous CPPIB reports can be traced to the varying definitions of expenses.