Another misleading argument made in favour of expanding the CPP is that it is a “low cost” pension plan. In reality, the operating expenses cited by the Canada Pension Plan Investment Board (CPPIB), which manages the CPP’s investments, cover only a portion of the total cost of running the CPP.

In 2014, the CPPIB’s reported operating expenses were $803 million. This did not include external management fees ($1.3 billion) and the transaction costs ($273 million) for executing the CPPIB’s investment strategy. The federal government also incurs some of the costs directly, such as those for collecting CPP contributions, administering CPP benefit payouts, and other administrative tasks necessary for running the program—a total of $534 million. In 2014, the full cost for the CPP program was $2.9 billion—more than three and half times the $803 million the CPPIB reported as its operating cost that year.

As a share of assets, a common measure of the relative cost of pensions, the CPP’s cost is 1.06 percent. The cost has more than doubled over the past 10 years as the CPPIB has become more active and aggressive in its investment strategy.