Life expectancies have increased considerably since these programs were designed.
The number of Old Age Security beneficiaries is projected to double between 2019 and 2060.
Accounting for non-pension assets in projections of future retirement income makes a difference.
A higher CPP benefit could trigger a reduction in federal (and provincial) government benefits targeted at low-income seniors.
Reforming OAS so that high-income seniors receive fewer benefits could produce cost-savings to pay for increased benefits to vulnerable seniors.
Increased OAS spending means less spending elsewhere, higher taxes, and/or more government borrowing.
In 2012, the federal government shocked many Canadians by announcing an important change in the cherished Old Age Security (OAS) program, one of three key income programs for seniors. The reform, which was implemented in the 2013 budget, increases the age of eligibility for OAS to 67 from 65 beginning in 2023 with full implementation achieved in 2029. While the reform is a positive first step given the aging of Canadians, more is needed.
Canadian governments have amassed huge obligations which current tax rates leave unfunded. As a result, young Canadians and future taxpayers are on the hook for the over-promises governments have made in the form of public pensions and medical services. We estimate that the unfunded liabilities of these government programs amount to a $1.6 trillion fiscal hole or $102,168 per Canadian taxpayer.