In light of recent media speculation, many seniors have been asking me if their Old Age Security (OAS) cheque will stay the same. Other Canadians close to retirement have been asking whether OAS will be there for them when they reach the age of 65.
The answer to both questions is yes.
The Conservative Government is committed to protecting retirement income for today’s seniors and for future generations to come. While the Canada Pension Plan (CPP) is funded by premiums from each of our paycheques and is safely invested to meet the needs of future retirees, OAS is funded from general government revenue –the program is paid for by current taxpayers. Here is why this is going to be a problem:
In 1975 there were seven working taxpayers for every senior. Today there are only four working-age Canadians for each senior. By 2030, there will only be two working-age Canadians for each senior. The annual cost of OAS is projected to increase from $36 billion in 2010 to $108 billion in 2030.
Fewer working taxpayers supporting more recipients will put enormous pressure on government finances in the future.
The Managing Director of the MacDonald-Laurier Institute, Brian Lee Crowley, stated, “The federal government currently spends about 15 per cent of all spending on OAS/GIS and that’s supposed to be go up to about 25 per cent. But if you’re going to put up spending on that by 10 percentage points of everything the federal government spends, you’re going to have to either put up taxes or make some cuts somewhere else.”
The Conservative Government will take responsible action to ensure financial stability for future generations of seniors.
We have been very clear. If you are currently receiving OAS benefits you will see no changes. Nor will there be any changes for Canadians nearing retirement. Canadians not near retirement will have ample time to plan for their future.
Government House Leader, Peter Van Loan said, “All seniors should rest assured; those who collect OAS today will continue to collect it without any change. Our focus is on the medium and long-term and ensuring the sustainability of the system...”
The Conservative Government values the life-long contributions seniors have made in building this country and will continue to protect their retirement income as we move forward to address the challenges that lay ahead.