|Forging Two Solitudes: The Divisive Politics of Changing Old Age Security|
by: Peggy Taillon, CCSD President & CEO
The following is an introductory excerpt from the report "Forging Two Solitudes: The Divisive Politics of Changing Old Age Security". The complete document is available for download (PDF).
Old Age… Security?
While addressing the World Economic Forum in Davos Switzerland on January 26, 2012, Prime Minister Stephen Harper signalled his government would bring forward “major transformations” to the country in the coming months — in areas such as the retirement income system, immigration, science and technology investment and the energy sector — while making a forceful case for pro-growth economic policies over entitlements. Of those reforms, Harper suggested that getting a grip on rising costs associated with Canada’s pension programs the key priority.
Harper said the centerpiece of the public pension system — the Canada Pension Plan — is fully funded, actuarially sound and does not need to be changed. But he added: “For those elements of the system that are not funded, we will make the changes necessary to ensure sustainability for the next generation while not affecting current recipients.” By default, it became clear that Old Age Security (OAS) was clearly the target, wide-spread speculation began in earnest. The idea that one of the pillars in Canada’s income security programs was in the government’s sights at a time of increased financial uncertainty and growing inequality, sparked an outcry from leading economists, social policy and seniors groups across the country.
Following the Davos speech government talking points surfaced that suggested that the OAS is no longer sustainable and that Canadian " demographics constitute a threat to the social programs and services that Canadians cherish". As the population ages, OAS costs are expected to rise to $108 billion a year in 2030 from $36 billion in 2010. That's because the number of Canadians over 65 will rise to 9.3 million in 2030 from 4.7 million in 2010. Numbers provided by the Prime Minister's Office say there were four taxpayers for every senior in 2010, but casino by 2030 it will drop to two taxpayers for every senior.
Once the underlying message in the Davos speech was decoded, it became clear slots online that the government was looking to raise the age of online casino reviews eligibility from 65 to 67. When the public outcry grew louder, the government clarified that proposed changes would not effect those receiving the OAS now, but rather the changes would casino portugal be implemented australian online pokies in the future, possibly ten years from now.
The OAS is a cornerstone of the retirement security system and, together with the Guaranteed Income Supplement, has been the main reason poverty among seniors in Canada is so low. It is an income grant available to everyone who has been resident in the country for at least ten years and no deposit casino bonuses unlike the GIS taxed back only a relatively higher income. But since the population is aging and the number of taxpayers is dwindling, the program is characterized by some, including now the Harper government, as unsustainable in its current form.
An internal memo from the Prime Minister's Office to Conservative Party supporters says the government will make sure seniors keep getting all the benefits they get now. "To be clear: there will be no changes to the benefits seniors currently receive," said the memo, obtained by CBC News. "We will ensure any changes are done with substantial notice and adjustment period and in a way that does not affect current retirees or those close to retirement, and gives others plenty of time to adjust and plan for their retirement." (February 2012)
This briefing note looks at the history of Old Age Security and its notable success in reducing – along with the Guaranteed Income Supplement (GIS) and CPP/QPP – poverty among seniors. The paper then examines the demographic and economic pressures facing the program today and looks at the wide range of proposals that have been put forward to strengthen the program. Canadians deserve a real debate about Old Age Security.