Question Period Note: PUBLIC ACCOUNTS OF CANADA 2025 FOR EMPLOYMENT AND SOCIAL DEVELOPMENT CANADA

Uncertainty in the financial markets have caused public concern regarding the
long-term sustainability of the Canada Pension Plan (CPP).

The Canada Pension Plan is fully sustainable for at least the next 75 years
as demonstrated in the 31st Actuarial Report.
 The Canada Pension Plan fund has a long investment horizon that is
designed to absorb periodic downturns in the financial sector.
 In the first fiscal quarter of 2025-2026, Canada Pension Plan investments
generated a positive return of 1.0 percent. The net assets of the fund
increased by $17.3 billion due to investment income and transfers from the
Canada Pension Plan.
 The true measure of success for CPPIB is its long-term performance. The
annualized real return (after inflation) for the base CPP fund was 8.5
percent over the last 10 years, and 5.9 percent for the additional CPP fund
since its inception, which is, when aggregated, above the Chief Actuary’s
assumptions.

The CPP is a social insurance plan that is funded by the contributions of employees, employers
and self-employed persons, and by the revenue earned on CPP investments. The CPP benefits
consist of retirement pensions, along with disability, death, survivor, post-retirement and
children’s benefits. Quebec has a separate but comparable plan, the Québec Pension Plan.
The CPPIB invests the funds not needed by the CPP to pay current benefits and operating
expenses. As of June 30, 2025, the CPPIB held net assets of $731.7 billion, an increase of
$17.3 billion from the previous quarter ended March 31, 2025, and an increase of approximately
$84.9 billion from June 30, 2024. The increase in net assets observed in the first quarter of
2025-2026 is due to transfers from the CPP (from workers and employers’ contributions) and a
positive return on investment of 1.0 percent.
Since it was created in 1997, the CPPIB has yielded higher than expected rates of returns on
investments. The CPP Fund is invested for the long term, has a broadly diversified portfolio and
steady cash inflows, and is structured to withstand stock market cycles. The CPP portfolio was
designed to be resilient, enabling it to weather severe market events – such as the current
situation.

Approximately 6.8 million CPP beneficiaries were paid a total of
$65.1 billion in 2024-2025.
 As of June 30, 2025, the CPP Funds managed by Canada Pension Plan
Investment Board (CPPIB) have $731.7 billion in net assets, which
represents an increase of 13.1 percent over the previous year ($646.8
billion as of June 30, 2024).