A single sentence from Prime Minister Stephen Harper during a speech in Davos, Switzerland has this country buzzing about the future of Canada’s old age security.
One suggested change to OAS could include increasing the age of entitlement from 65 to 67, a move every other G8 country has already implemented in an effort to provide long-term sustainability for the pension. OAS is money that every retired Canadian 65 years or older can claim as a retirement supplement.
As the baby boomers start squeezing through traditionally narrow pension channels, changes are needed to accommodate all of them.
Today, the taxes of four employed Canadians supports each retired Canadian through OAS. In the coming years, that ratio will drop from 4:1 to 2:1.
In monetary terms, costs for the program are expected to rise 32 per cent over the next five years to $48.3 billion. By 2030, OAS will cost $108 billion.
Based on demographics alone, OAS as it stands now simply won’t survive.
Seniors advocate groups were quick to jump on Harper’s idea, shunning it as irresponsible. But changes would be phased in and aren’t likely to affect anybody nearing retirement now, and certainly not people already collecting OAS.
If any group should be nervous, it’s working Canadians in their 30s, 40s or 50s who will be stifled from advancing because people are working longer, and who will be forced to pay more to support the bulging retirees ahead of them.
By making changes to OAS, at least there is hope there will be a few pennies left for future generations.
The baby boomers are the only generation in history to live better than both their parents and their offspring. Opposing reforms that will ensure the OAS program’s future is simply a characteristic forged from a generation that has had it better than everyone else.