“Raising the age of eligibility for OAS is regressive legislation.”
In response to the letter by Joseph Di Federico, Bolton, ‘Enterprise’
Mr. Federico was looking for the right facts in all the wrong places when he challenged Scott Brison’s comments on Old Age Security. Conservative think-tanks and organizations may not be the best place to check out economic facts that expose the current government’s ideology. But, concerned about my hard-working tax-paying children’s right to get their benefits at 65, I thought it would be wise to go to a reliable source to get the facts on the future of Old Age Security in Canada.
Enter Robert L. Brown, past president and fellow of the Canadian Institute of Actuaries, who just happened to pen an excellent article for the Globe and Mail titled, “Debate the OAS on facts.” It turns out that the Chief Actuary of the OAS system reports regularly and publicly on the system’s financial health. According to the Chief Actuary, we do not need to worry about the sustainability of our Old Age Security.
Yes, the costs (including the Guaranteed Income Supplement) will rise from $37 billion today to $108 billion by 2030, but Brown reveals that these figures are “meaningless on their own.” He draws on a number of factors including the fact that the OAS is taxable, that it is clawed back according to income, and that the number of recipients will fall drastically by 2030. For every Canadian aged 65+ in 2007, there were 4.7 Canadians aged 20 to 64. By 2030, that ratio drops to 2.4, almost half the demand on the OAS.
In addition to the economic facts, Brown also provides the example of the impact on a worker who retires at 65 and could easily live for another ten years. “If you raise the age of eligibility for OAS from 65 to 67 you remove 20 percent of that person’s expected benefits.” Brown concludes, “Raising the age of eligibility for OAS is regressive legislation.”
We should also consider these facts in light of the recent report by the Canadian Parliamentary Budget Officer, Kevin Page. He revised his original concerns about the OAS after the Conservative Government quietly broke a promise and announced on December 19, 2011 that it would no longer be transferring the annual 6% increase in Canada Health Transfers to the provinces. Page recalculated that the increased revenue not only makes the OAS sustainable, but will provide enough cash flow versus payments to allow for enrichment of these programs.
Mr. Di Federico, thanks for alerting us to seek out the facts. Now, if every person aged 18 to 63 writes a letter to the Minister of Finance, the Prime Minister, and our local MP, they might be better informed. And at the next federal election, let them know how you will feel about losing 20 percent of your OAS retirement benefits.
Skid Crease, Caledon