Old age security reform

[capricorn]

Prime Minister Harper signaled in Davos that he will tackle Canada's retirement income system. Speculation is that what he'll address first is raising to 67 the age at which Canadians can qualify for Old Age Security benefits.

The Prime Minister signalled in Davos, Switzerland this week that he’s prepared to use the front end of his majority government to tackle long-standing fiscal problems that have left previous governments running in fear.

The most politically challenging will be his effort to put Canada’s “retirement income system” on a sustainable footing. Given that he made clear he was not talking about the Canada Pension Plan, that leaves Old Age Security – an income stream for Canadians 65 and over.

The cost of the program is poised to soar as the baby boom generation retires, which is starting now.

http://www.theglobeandmail.com/news/politics/ottawa-notebook/opposition-fire-back-against-harper-threats-to-pension-system/article2316277/

Predictably, this is being labelled an attack on seniors by the opposition parties.

“Now, he’s threatening ... seems to be trying to precondition us to cuts to the OAS, which is there to help the lowest income Canadians,” charged Mr. Brison. “At a time when other global leaders at Davos are addressing income inequality not only is Harper ignoring it he’s threatening to make it worse.”

Mr. Brison asserted the OAS is “very important for low income seniors and one of the reasons why Canada is successful economically is because we are progressive socially and we help vulnerable people.”

“If Harper is hinting that he intends to cut benefits for low income seniors we will fight that every step of the way,” he said.

Mr. Julian suggested Mr. Harper is hinting that seniors would have to work two more years - until they are 67 - to qualify for OAS.

In addition, Mr. Julian remarked on the timing of Mr. Harper’s remarks, saying it’s “odd to hear a Prime Minister speaking to the world’s billionaires in Switzerland and talking about transformative change to our pension system even before holding that discussion here in Canada.”

http://www.theglobeandmail.com/news/politics/ottawa-notebook/opposition-fire-back-against-harper-threats-to-pension-system/article2316277/

If this is indeed Harper's intention, he's taking the bull by the horns by tackling what will probably be the most explosive aspect of pension reform. Should he be able to pull this off, whatever else he attempts on pension reform may be an easier sell.

There is one positive outcome to this proposed reform that I haven't seen expressed anywhere. It is that by making Canadians wait 2 extra years before drawing the OAS payment, it will make them pause and start to think about planning for their retirement. I believe that in itself would be beneficial in the long term.

[Topaz]

There's good and bad on this one. The bad is for the person 65 who NEEDS to retire but can't afford it and has to wait but also some companies start to DEDUCT OAS from their company pensions and now if this passes, they will have to wait two years, which corporations won't like. There's also may be a outcry from boomers from this while at the same time, the MP's walk away with their own pensions not touched. I can see QP being reall nasty next week when it returns. My question is, how are the Tory supporters going to deal with this if they can't get their OAS??

[waldo]

There is one positive outcome to this proposed reform that I haven't seen expressed anywhere. It is that by making Canadians wait 2 extra years before drawing the OAS payment, it will make them pause and start to think about planning for their retirement. I believe that in itself would be beneficial in the long term.

you probably haven't seen it expressed anywhere because it's a non-starter... retirement planning has not been a traditional forte of Canadians, at large. Tacking another 2 years on the minimal OAS payout won't drive a sudden wave of financial self-responsibility. If Harper actually has the metal to pursue this, the real question, of course, will be what ages will be 'grandfathered'... just when would it, effectively, be applied? Given the sorry state of retirement planning I would be surprised to see it targeted for anyone greater than, say... 55 years old today.

[scribblet]

Prime Minister Harper signaled in Davos that he will tackle Canada's retirement income system. Speculation is that what he'll address first is raising to 67 the age at which Canadians can qualify for Old Age Security benefits.

Predictably, this is being labelled an attack on seniors by the opposition parties.

Extremely predictable, it's started allready...

The current system is unsustainable considering the aging population and so on, but I doubt it will be as draconian as the usual culprits are speculating it will be. Certainly I hope it's not as draconian as Paul Martin's proposed Seniors' Benefit which went down in flames to major opposition. I can't imagine that PM Harper would go that far.

So far we have no clue as to what wait happen, As far as the age 67 bit, I would expect maybe something similar to the CPP, or some incentives to delay taking the OAS - I'll reserve judgment until we get some facts.

[punked]

Nice to see Harper making an announcement which affects all Canadians in front a bunch of Millionairs in Switzerland instead of in front our own Parliament. For a change so big you would think it should start with a real talk to Canadians but not with this PM.

[Smallc]

Nice to see Harper making an announcement which affects all Canadians in front a bunch of Millionairs in Switzerland instead of in front our own Parliament. For a change so big you would think it should start with a real talk to Canadians but not with this PM.

Because Canadians aren't hearing about this, are they?

[waldo]

Because Canadians aren't hearing about this, are they?

optics!

in any case, in an after-the-fact scramble given the uncertainty and speculation that arose... because the Harper Conservatives didn't properly present the topic/issue/problem/potential:

From: Alerte-Info-Alert [PMO]

Sent: Friday, January 27, 2012 11:46 AM

To: Alerte-Info-Alert [PMO]

Subject: Old Age Security

Old Age Security

Media are speculating that the federal Government may make changes to Old Age Security.

Our Government is committed to ensuring the retirement security of Canadians.

The Harper Government will ensure that seniors maintain ALL the benefits they currently receive.

To be clear: there will be no changes to the benefits seniors currently receive.

We will ensure any changes are done with substantial notice and adjustment period and in a way that does not affect current retirees or those close to retirement, and gives others plenty of time to adjust and plan for their retirement.

In Canada, there are two important programs that provide financial support to older Canadians: CPP/QPP and OAS.

CPP is funded through premiums that working Canadians pay with each paycheque and is on a secure and sustainable path. It does not need to be changed.

OAS is funded primarily through taxes on working people and is unsustainable on its current course.

For example:

- The number of Canadians over the age of 65 will increase from 4.7 million to 9.3 million over the next 20 years.

- The OAS program was built when Canadians were not living the longer, healthier lives they are today.

- Consequently, the cost of the OAS program will increase from $36B per year in 2010 to $108B per year in 2030.

- Meanwhile, by 2030, the number of taxpayers for every senior will be 2 - down from 4 in 2010.

If we do nothing, OAS will eventually become too expensive and unsustainable.

Our Government will act to protect OAS.

We will not put the financial security and well-being of our seniors at risk.

We will take balanced, responsible, and prudent action to ensure OAS remains sustainable for future generations of Canadians.

Background - Retirement Security

Since 2006, we have:

- Increased the Guaranteed Income Supplement for the most vulnerable seniors

- Introduced pension income splitting and increased the age credit

- Introduced innovative new programs such as the tax-free savings account and the PRPP to help Canadians save for retirement.

As a result of our actions, seniors can individually earn approximately $19,000 per year or $38,000 as a couple before paying federal taxes.

Lines to Define the Expected Opposition Attack

We know the Opposition will attack any adjustments to the OAS program.

We know their approach. It's the same tired (failed) approach to deficits and debt that led to the economic crisis in Europe.

The NDP prefers a "head in the sand" approach - ignore the problem until it is too late to save OAS benefits.

Their irresponsible, reckless, and dangerous approach to Canada's finances would put the entire OAS program at risk.

The NDP would put at risk the financial security of millions of middle aged working Canadians - all future generations - who are planning on OAS being there when they need it.

It demonstrates that the NDP is too dangerous for Canadians planning for their retirement.

[Shady]

you probably haven't seen it expressed anywhere because it's a non-starter... retirement planning has not been a traditional forte of Canadians, at large. Tacking another 2 years on the minimal OAS payout won't drive a sudden wave of financial self-responsibility. If Harper actually has the metal to pursue this, the real question, of course, will be what ages will be 'grandfathered'... just when would it, effectively, be applied? Given the sorry state of retirement planning I would be surprised to see it targeted for anyone greater than, say... 55 years old today.

Wow, something I can agree with waldo on. I would assume that it would have to be grandfathered in. Raising the age to 66 for people 55 - 40, and than to 67 for everyone under 40. Something like that.

It needs to be done.

[eyeball]

Wow, something I can agree with waldo on. I would assume that it would have to be grandfathered in. Raising the age to 66 for people 55 - 40, and than to 67 for everyone under 40. Something like that.

It needs to be done.

Set an example and do it to the politicians first.

[capricorn]

Tacking another 2 years on the minimal OAS payout won't drive a sudden wave of financial self-responsibility.

Maybe not.

If Harper actually has the metal to pursue this, the real question, of course, will be what ages will be 'grandfathered'... just when would it, effectively, be applied? Given the sorry state of retirement planning I would be surprised to see it targeted for anyone greater than, say... 55 years old today.

Details are supposed to come with the budget. I haven't looked at the numbers in terms of the projection of reduced OAS spending per GDP over time. Whatever, Canadians will have plenty of time to adjust to the new reality.

[Smallc]

Exactly. There wasn't supposed to be details in this speech. It was simply to let everyone know that something was coming.

[LonJowett]

It was simply to let everyone know that something was coming.

I guess he could have done that in the election campaign, but that would have been too upfront and honest.

[PIK]

I imagine it will be around 45 years old and under will have to wait until 67. But the seniors better not get to upset, because alot that are collecting did not pay enough in for what they get. Maybe there should be a seniors helping seniors by the ones that are well off and there is plenty, to not bother even collecting it. There seems to be some sort of myth that once you hit 65 you are a poor senior, well there is poor ones but alot of them now are very well off. I am 51 and it seems my whole working life is paying off the debt, the debt that was mainly built by these seniors, and I am getting sick of it.

[capricorn]

Nice to see Harper making an announcement which affects all Canadians in front a bunch of Millionairs in Switzerland instead of in front our own Parliament. For a change so big you would think it should start with a real talk to Canadians but not with this PM.

His comments in Davos came from a discussion on pension reform with the other countries in attendance. You know, the ones who should be taking drastic action of their own overly generous pension plans. You know, the countries whose economic collapse would take us down with them. Not to worry, there will soon be a budget with details of this proposed reform which Parliament will debate.

[capricorn]

Set an example and do it to the politicians first.

I'll settle for at the same time.

[capricorn]

Exactly. There wasn't supposed to be details in this speech. It was simply to let everyone know that something was coming.

I also think Harper wanted to show some leadership at this meeting by giving a broad outline of his plans for pension reform in Canada hoping some countries would follow suit. This was no secret to Canadians as he raised pension reform in a recent Mansbridge interview.

Harper's pension comments start at the 17.:27 mark. He also mentions public service and MP pensions

http://www.cbc.ca/thenational/mansbridge/

edit to add video link

Edited January 27, 2012 by capricorn

[Topaz]

I just checked on CTV and CBC polls and CTV's had 1305 voting 434- 33% yes, 870- 67% NO, CBC- 1600- 290-18.1 yes 1250-78% NO and 62-3.87% not sure. So far the polls say NO and I wonder if Harper will think twice about this or will he see the same thing happen when he shut down Parliament.

[PIK]

I just checked on CTV and CBC polls and CTV's had 1305 voting 434- 33% yes, 870- 67% NO, CBC- 1600- 290-18.1 yes 1250-78% NO and 62-3.87% not sure. So far the polls say NO and I wonder if Harper will think twice about this or will he see the same thing happen when he shut down Parliament.

Does not matter what the people think, this is something that has to be done now, not later ,but now. Really what we should be doing is reviewing the languge issue multiculturism and immigration and that alone would be enough to fix most of the countries problems.

[waldo]

Wow, something I can agree with waldo on. I would assume that it would have to be grandfathered in. Raising the age to 66 for people 55 - 40, and than to 67 for everyone under 40. Something like that.

It needs to be done.

no - at this stage I most certainly don't accept anything Conservatives are 'floating' on this. This simply strikes as opportunism and piecemeal. At the very least, given their track record, significant independent scrutiny on the Conservative numbers and estimates needs to be forthcoming. For something described as 2030 unsustainable, just how does a 2-year extension on OAS benefits make it... sustainable? Oh wait... you mean it's only a part of a concerted effort on several fronts? Really? What other fronts/avenues will make OAS sustainable by 2030... adding to the 'floated' 2-year eligibility extension suggestion? What other possibilities have been considered as an alternative to simply raising the benefit age?

given questions of decreasing longevity and decreased quality of health, I suggest the last thing the government should be considering is tapping into some degree of established social contract during the last life phase of Canadians.

[waldo]

But the seniors better not get to upset, because alot that are collecting did not pay enough in for what they get.

citation request - qualification on "a lot", "pay enough" and "what they get"

[waldo]

Really what we should be doing is reviewing the languge issue multiculturism and immigration and that alone would be enough to fix most of the countries problems.

pfffft!

[Guest Peeves]

Extremely predictable, it's started allready...

The current system is unsustainable considering the aging population and so on, but I doubt it will be as draconian as the usual culprits are speculating it will be. Certainly I hope it's not as draconian as Paul Martin's proposed Seniors' Benefit which went down in flames to major opposition. I can't imagine that PM Harper would go that far.

So far we have no clue as to what wait happen, As far as the age 67 bit, I would expect maybe something similar to the CPP, or some incentives to delay taking the OAS - I'll reserve judgment until we get some facts.

Mulroney government pension reforms were shot down as were Cretiens by anger response. I wonder if attitudes have changed along with the financial times ?

However it's implemented over probably several years, there had better be a serious reduction in MP pensions to start.

[Guest Peeves]

pfffft!

Hey nothing to pfffft at, lots of room there for consideration.

Our refugee programs and 'illegals' programs to. 15 years to kick a liar and cheat out of the country with appeal after appeal after appeal is expensive.

Phonie refugee claim hearings after hearings while benefits are paid for years. I think Harper has made strides, but if we're looking to cut costs...pensions, let's look at other programs that might save monies and soften some of the pension woes.

[Guest Peeves]

citation request - qualification on "a lot", "pay enough" and "what they get"

What about inmates?

"Motion 507 reads as follows: “That, in the opinion of the House, the government should prohibit the payment of Old Age Security and Guaranteed Income Supplement payments to individuals serving life sentences for multiple murders, except where the individual is released from prison, and allocate the proceeds to a Victims Compensation Program administered by the provinces.”"

And not too many moons ago...

Didn't the NDP want OAS after a short term in Canada? Talk about out of touch with reality.

"Aug. 30,2011: I am disappointed to see that NDP Deputy Leader Libby Davies recently introduced a Private Member's proposal that would cost Canadian taxpayers a billion dollars and give expensive taxpayer-funded benefits to those who may have never paid any taxes in Canada and do not deserve them.

The NDP has now joined hands with the Liberals in asking the government to reduce the residency requirement to receive taxpayer-funded Old Age Security. The Liberals and NDP want us to reduce the residency requirement from 10 years to only a few short years.

This would mean that someone who only recently arrived in Canada would receive Old Age Security and a Guaranteed Income Supplement, just like someone who has worked hard for 10 years or more, paid taxes, and contributed to Canadian society."

http://www.portstanleynews.com/details/headline.aspx?menu=1024_News_Editorials_NDP+Reintroduces+Costly+Old+Age+Security+Bill

Edited January 27, 2012 by Peeves

[punked]

Does not matter what the people think, this is something that has to be done now, not later ,but now. Really what we should be doing is reviewing the languge issue multiculturism and immigration and that alone would be enough to fix most of the countries problems.

It does matter what the people think, it always matters what the people think. Is this what conservatives believe?