In December, Stephen Harper announced his withdrawal from any meaningful federal role in preserving Canada’s Medicare system. The country is headed for a patchwork of deficient provincial programs, but Mr. Harper thinks that’s okay.
Now, he’s threatening another pillar of Canadian society – the basic Old Age Security (OAS) system.
This latest threat came in a speech Mr. Harper gave last week to the richest people in the world at a posh resort in Switzerland. Some think it’s just a red herring – to divert attention from other painful cuts to federal programs and services likely to be in the up-coming Conservative budget.
But if this threat is real, the Conservatives are launching a direct attack on low and middle-income Canadian seniors – especially elderly women – who may have nothing but the OAS to count-on in their retirement. The result will be deepening inequality.
Most wealthier Canadians don’t qualify for OAS. So losing it is not relevant to them.
Old Age Security mainly helps those with incomes below $70,000. The maximum OAS benefit amounts to $540/month, plus you may get an additional “Guaranteed Income Supplement” (up to $732/month) if you have no other source of retirement income.
This is what the Conservatives want to “curtail”. The full burden will fall on the most vulnerable Canadians.
The government claims that unless they cut the OAS, the country will be bankrupted.
But they’re wrong. Yes, the Baby Boomer retirement bulge is just beginning, and they’ll become the biggest retirement generation in history. But even with all those extra numbers, the impact on the cost of OAS is relatively small.
OAS payments today cost 2.4% of our national GDP. When the Boomers max out in 2031, that percentage will climb to 3.2%, and then begin dropping again.
This has to be well-managed, but it’s no “threat” to Canada’s fiscal integrity.
