Prime Minister Stephen Harper has unveiled what he sees as the biggest threat to the nation’s economic future: Canada’s seniors.
Harper chose a gathering of the world’s political and business elite last week at the Global Economic Forum in Davos, Switzerland to launch a pre-emptive strike against “a threat to the social programs and services that Canadians cherish.” He said his government will be taking measures in the coming months to deal with that threat presented by Canada’s aging population.
While Harper said the Canada Pension Plan is fully funded and does not need to be changed, the prime minister’s staff released documents showing the cost of the country’s Old Age Security program will rise from $36.5 billion in 2010 to $108 billion in 2030.
The comments led to immediate speculation by the media and opposition parties that the Conservative government was preparing to target the Old Age Security system in the coming budget.
Under OAS, Canadians over the age of 65 are eligible for monthly benefits of $540. That money is clawed back from seniors with taxable income over $69,000 and eliminated entirely for those with annual incomes over $112,000.
While the Conservative government will likely make changes to those income thresholds, to achieve real savings the government would have to look at raising the age of eligibility — with speculation and previous internal government debate suggesting raising the age to 67.
More than four million Canadians will be turning 65 over the next decade. Many of those are depending on OAS to supplement the retirement they have been planning for all their working lives.
The government is certainly right in identifying the economic pressures created by an aging demographic, but changes to the retirement age should be seen as a last resort and not a quick fix.
