Canadians will receive $16.2B of federal pension savings from 2019-20

CITIC said Monday it will save the federal government $16 billion over the next five years by transferring $6.6 billion to provincial and territorial governments through a pension plan that has been in place since 1997.

The pension savings will come as part of a package of measures that CITic said will help the government reduce its budget deficit and increase its revenue base.

“Our investment in pension benefits will allow us to manage our fiscal challenges while delivering on our promise to invest in our communities and invest in people’s future,” CITC Chief Financial Officer Scott Smith said in a release.CITIC will also contribute $1.6 trillion to its general fund, which is expected to be a major contributor to the government’s 2017 budget.

The savings come on top of $4.5 billion in the 2016 budget and $2.6 to $3.4 billion in other major federal pension benefits, including $2 billion to the Canada Pension Plan Investment Board.

Canada has a national pension plan with $8 billion in annual contributions.

The province of British Columbia has the highest-deductible plan in Canada, which costs taxpayers $7,500 annually.