A necessary change
The Federal government has proposed changes to Old Age Security (OAS) which include raising the age of eligibility from 65 to 67 starting in 2023. The change is needed to preserve the OAS system due to Canada’s changing demographics.
We have two important programs that provide financial support to older Canadians: CPP and OAS. CPP is funded through premiums that working Canadians pay, and is on a secure and sustainable path with no need for change. OAS is funded primarily through taxes on working people and is unsustainable on its current course. When OAS was first introduced in 1927 it began at age 70. That was reduced to age 65 over a four year period, 1965-69.
In 1975 there were seven working taxpayers for every senior. Today there are only four working-age Canadians for each senior. By 2030, the number of seniors will nearly double, leaving only two working-age Canadians for each senior. Canadians are also living longer, healthier lives than when the OAS program was established. Due to these changing demographics, the annual cost of OAS is projected to increase from $36 billion in 2010 to $108 billion in 2030.
If the Government does nothing, OAS will become too expensive and unsustainable. Many other developed countries, such as Germany, have made similar changes to ensure future viability of their OAS programs. If the Government did nothing to protect OAS it would put the financial security of our seniors at risk. This decision is balanced and responsible action to ensure OAS remains sustainable for future generations of Canadians.
Personally, I am disappointed that the opposition would rather play on the emotions of seniors for political gain rather than take prudent action to ensure the future viability of OAS.
I think this change will benefit us as a nation.
What do you think?