A Tale of Two Pension Plans: The Differing Fortunes of the Canada and Quebec Pension Plans

The Canada Pension Plan (CPP) and the Quebec Pension Plan (QPP) are headed towards an historical crossroads. The most recent actuarial valuation of the CPP shows that the federal scheme is sound in its financing and should remain financially sound for the foreseeable future, without the need for any increase in its contribution rate over the next 75 years. Not entirely so, however, for the QPP. Although the Quebec plan is in no imminent financial difficulty, its most recent actuarial valuation indicates that changes to the QPP’s financing or benefits must be made well before 2050 or the scheme will be unable to meet its commitments fully after that year. This paper examines the reasons for the divergence in the financial projections of the Canada and the Quebec Pension Plans and proposes ways in which the parallelism of the two schemes, which has been a mainstay of federal and provincial policy for over four decades, can be maintained.
ISBN – 1-55382-270-6