Unless you turned 54 last Saturday, you have missed out on being able to apply for Old Age Security (OAS) at age 65. Under a plan announced by federal Finance Minister Jim Flaherty in last week’s budget, anyone now 53 and younger will not be eligible to receive OAS until age 67. This plan will be phased in over a six-year period beginning in 2023. So start saving – if that is possible.
The plan to move OAS eligibility to 67 will effectively add 70,000 more seniors to the number of elderly living in poverty since the budget did not make any auxiliary adjustments such as increasing the Guaranteed Income Supplement (GIS) that assists the most needy retirees. It is projected that by 2030, 23 per cent of the Canadian population will be over 65, which is twice the 1990 figure.
We can all agree that the Feds must respond to the changing demographic and what it will mean for our ability to financially support our elderly in the future. The Feds are bringing forward their plan to ensure the “viability” of a pension support program that takes into account a smaller pool of workers contributing to the government pension fund while the number of retirees who will draw from it continues to grow.
But the concern comes with the projected pace of this transition.
The United States laid out a 50-year plan to phase in its retirement age adjustment in anticipation of the number of retiring boomers. The program began in 1983, allowing enough time for the American population to get in tune.
Another criticism of this move by the Feds is that with this plan the government is taking an all-or-nothing approach. There are certain types of physically or mentally demanding employment that can exhaust a worker by the time he or she reaches age 50 – personal care work and domestic work being two examples. Yet, because such jobs typically are low paid, they will in future not allow for a reasonable retirement schedule. It seems heartless to try to force workers who are in failing health to keep working when it is clear that they are better off living in retirement.
What will surely result is an increase in older people joining the welfare rolls, and provinces have to be worried about that since welfare payments are a provincial responsibility.
Ontario’s response to the looming challenge can be seen in the Liberal government’s proposal for a 50-50 cost sharing retirement saving program for civil servants and teachers. On this issue, Ontario’s Liberal government and the federal Conservative government are on the same page since the Feds will require public servants to contribute 50 per cent of the payment to their retirement benefit.
What neither government is clearly proposing are measures to support older workers so that they can continue to find employment until the proposed new retirement age. It is hard enough now for men over 50 seeking jobs to get a foot in the door. The fact that age discrimination stands as a barrier to employment has to be looked at. If the retirement age is moved to 67, legislation has to be put in place – or strengthened – to discourage discrimination on the basis of age in hiring practices?
Where, too, is the government’s plan to encourage more immigrants to make their lives and their livelihoods in Canada? As a solution to increasing the tax pool, our immigration policy becomes critical. Yet, rather than focus on clearing the problematic backlog, the government has just cancelled 200,000 immigration applications from foreign workers and cut the budget for the immigration department. This is ostensibly to create a more efficient system, but given Canada’s longstanding need for skilled workers, greater effort is needed. Moreover, the professional level immigrants who are allowed in are stymied in their search for equivalent employment by a slew of regulatory organizations that make it next to impossible.
If the government wants to be able to afford the growing demand on the retirement fund it need look no further than how it deals with skilled and professional immigrants.