Old Age Security Canada: Jim Flaherty Says Cuts To Elderly Benefits Won't Come Until At Least 2020

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OLD AGE SECURITY CANADA
Canadians won't have to worry about cuts to elderly benefits for years, Finance Minister Jim Flaherty said Friday, hinting that changes won't happen until at least 2020. (CP/Alamy) | CP/Alamy

OTTAWA - Canadians won't have to worry about cuts to elderly benefits for years, Finance Minister Jim Flaherty said Friday, hinting that changes won't happen until at least 2020.

The finance minister's statement about Old Age Security changes follows a week of opposition attacks in the Commons that the government is undermining seniors' income support for ideological reasons.

But Flaherty, speaking to reporters in Oshawa, Ont., sought to downplay the severity of changes he is expected to unveil in his upcoming budget in March.

The changes are not for tomorrow, he said.

"This is for 2020, 2025 so that people who are middle age and younger today ... can be assured that they will have these social programs properly funded, fiscally responsible, that they’ll be there for them in the future," he said.

A spokesman for the minister said later the comment should not be interpreted as setting firm dates on when such changes would take effect.

Flaherty hasn't spelled out exactly what changes to the OAS he intends to introduce in the upcoming budget, but Prime Minister Stephen Harper said in a recent interview that one option would see the age of eligibility raised to 67 from the current 65.

Other options include accelerating the claw-back provisions in the scheme, which currently pays out a maximum of $540 a month, so that benefits decline at lower income levels.

Benefits currently begin being clawed back when an senior's income reaches $69,562, with all benefits returned at $112,772.

Opposition critics continued to blast the government for sowing fear among Canadian seniors and those approaching retirement.

"I can tell you I'm getting phone calls every time Mr. Flaherty and Mr. Harper throw out another bomb. Seniors react and I know Conservative MPs are getting those calls as well," said NDP critic Peter Julian.

Liberal finance critic Scott Brison said even if the government decides to delay the implementation date, OAS will become a "ballot box question" in the next election.

The prime minister is still taking flak from critics for first raising the pension issue in Davos, Switzerland, last month rather than on Canadian soil.

But most of the opposition has formed around the government's claims that it needs to limit the growth in costs to OAS because as the baby boom generation enters retirement the costs will become unaffordable.

The chief actuary's calculation of costs look prohibitive. The drain on Ottawa's treasury is slated to triple from the current $36 billion to $108 billion in 2030.

But experts, including some commissioned by the government itself, have said the OAS and the GIS (Guaranteed Income Supplement) won't break Ottawa's bank.

Earlier this week, Parliamentary Budget Officer Kevin Page came to the same conclusion, noting that the increase on all government-funded benefits to the elderly relative to the size of the economy will only rise from the current 2.4 per cent to 3.2 per cent. That's a far cry from the over 10 per cent of gross domestic product that many European countries pay to seniors.

"The only reason they have for making changes is sustainability and that argument has been blown to smithereens," said Brison.

In his comments Friday, Flaherty said the government "cannot ignore the fact that we an aging population in Canada and we want to ensure sustainability over the long term of our important social programs, including health care ... and retirement income issues generally."

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