old age security

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With the holiday season now behind us, the oncoming flood of credit statements to Canadian households is a powerful reminder that there are no free lunches. Borrowing to pay for current consumption brings interest payments, and ultimately, the need to pay off principal balances. Most Canadians are intimately familiar with this reality when it comes to their household finances. But this same reality also applies to governments. As taxpayers, Canadian families are also responsible for interest on government debt. And these payments are significant.


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Some provincial politicians are again trying to make the dubious case that we have a "retirement income crisis" to revive calls for a mandatory expansion to the Canada Pension Plan (CPP).  While the issue is set to be on the agend


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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.


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When Canada’s premiers met recently in Halifax, talks of a possible pipeline to move oil from Alberta to eastern Canada dominated national headlines. There was also mention of talks about trade, immigration, skills training, and infrastructure. One issue that didn’t receive nearly as much attention is the management of public finances and growing government debt.


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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.