Golden story for golden years: Canada Pension Plan’s heavy resource reliance

4.7 million CPP pensioners have investments in resource and resource-supporting business to thank. 

Of the top 40 publicly-traded equity holdings in the Canada Pension Plan, which is a federal retirement fund, 24 are heavily dependent on natural resources, according to an analysis by Resource Works.

The companies, shown here, include six banks that have significant exposure to forestry, mining, oil & gas, and supporting infrastructure.

The remaining 18 companies with asterisks are more directly exposed to the export-rich commodity economy.

Highest on the list are energy companies including Canadian Natural, Suncor, Fortis and Teck. Potash producer Nutrien makes the list, as does miner Barrick. Without infrastructure, we would not be able to get the resource products to market, so the resource bucket also includes the two main railways, CN and CP, pipeline companies Enbridge, TransCanada and Pembina, as well as diversified holding groups Brookfield Asset Management and Brookfield Infrastructure. 

This top 40 also reflects that technical expertise to do resources right is also a major feature of the economy. Companies like SNC Lavalin ensure that the competencies are there to design and build resource infrastructure. 

When companies like these are strong, we can also know that innovation in diversification and transition is also strengthened. Asset managers and resource developers can only invest in renewables when they have a strong balance sheet, and in Canada that means resources. 

This list is a timely reminder that the Canada we know is one that includes tools that equalize diverse life circumstances. Without natural resources and the unique, special effects they have in the economy (which have been extensively documented here at Resource Works), it’s hard to imagine how Canada would be able to do this. Resources are good, solid, lifelong investments and that's why fund managers choose them. It's critically important that we continue to support them and ensure they are always able to thrive and improve, because without them Canada would be a lesser place, and our golden years would be less certain.


See the whole list here.

Benefits of the Canada Pension Plan (source):

  • The maximum pensionable earnings of the Canada Pension Plan (CPP) increased from $53,600 in 2015 to $54,900 in 2016. The contribution rate remained unchanged at 9.9%.
  • CPP contributions totalled $46.1 billion this year.
  • 5.5 million CPP beneficiaries were paid, representing a total annual benefit value of $40.8 billion.
  • 4.7 million CPP retirement pensioners were paid $31.4 billion this year.
  • 1.1 million surviving spouses or common-law partners and 65,000 children of deceased contributors were paid $4.6billion this year.
  • 332,000 people with disabilities and 82,000 of their children were paid $4.3 billion this year.
  • 150,000 recipients of death benefits were paid $347 million this year.
  • 954,000 post-retirement beneficiaries were paid $242 million this year.
  • Operating expenses amounted to $1.4 billion, or 3.47% of the $40.8 billion in benefits.
  • As at March 31, 2016, total CPP net assets were valued at $283.6 billion, of which $278.9 billion is managed by the CPP Investment Board.


Do you like this?