I would like to set the record straight on Prime Minister Harper’s recent comments at the Davos summit regarding Canada’s Old Age Security (OAS) program. I can understand why people have been upset by some of the speculation out there on any changes to OAS, but it is important they know that no specific changes were proposed or announced. It seems there are a number of rumours circulating about changes that would increase the retirement age from 65 to 67, but this is pure speculation. The Prime Minister simply noted that the current system is not sustainable in the long-term, and that we as Canadians must have a frank and honest discussion about our expectations for our retirement, and the actual capacity and role of the government in this area.
As we all know, Canada has an aging population, with the number of Canadians over the age of 65 expected to increase from 4.7 million today, to 9.3 million by 2030. At the same time, the ratio between the number of Canadians in the workforce and the number of Canadians over the age of 65 will decline from 4 workers for every pensioner today, to only 2 people working for every pensioner by 2030.
This trend has implications for Canada’s future generation of retirees. It is a discussion we must have if we are to avoid the kind of economic demise seen recently in so many European countries.
Unlike the Canada Pension Plan (CPP), which is funded entirely by contributions from workers and employers, and is actuarially sound for the next 75 years at current contributions levels, OAS is funded by Canadian tax payers through the federal government. In 2010, OAS cost $36.5 billion and based on current projections, annual OAS costs will reach upwards of $108 billion by 2030; a 300% increase that will have to be shouldered by a proportionately smaller workforce.
With this trend in front of us, measures must be taken to provide retirement security for Canadians. The government has indicated it will ensure today’s seniors maintain ALL the benefits they currently receive. To be clear, there will be no changes to benefits that seniors currently receive, or to benefits that people close to the age of 65 have been planning their retirement around. Any changes that are made must be done with ample notice and a transition period that will allow Canadians plenty of time to adjust and plan for their retirement.
I look forward to working with all Members of Parliament on providing retirement security for Canadians today, and into the future.
Bruce Stanton, M.P.