There are a lot of misconceptions swirling says Yorkton/Melville MP Garry Breitkreuz and he wants to set the record straight.
Speculation into potential adjustments to Old Age Security (OAS) has many Canadians asking questions about the current status and future of the federal government's financial retirement assistance program.
"We need to be perfectly clear about any changes being considered," says Breitkreuz. "No one currently receiving Old Age Security cheques will be affected, nor will anyone who is nearing retirement, but Canadians must understand that changes need to be considered or there will be no OAS for future generations."
Currently there are two federal programs in place to provide financial assistance to older Canadians: Old Age Security and the Canada Pension Plan (CPP). The CPP is funded through premiums that working Canadians pay with each paycheque. It is also on a secure and sustainable path and therefore does not need to be changed. The OAS, however, is funded primarily through taxes paid by working people and is unsustainable says Breitkreuz on its current course. A few simple facts:
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 cost of the OAS program will increase from $36 billion per year in 2010 to $108 billion per year in 2030. Today's entire federal budget is $237 billion.
By 2030, the number of taxpayers for every senior will be two, down from four in 2010.
"If we ignore the reality of our aging population, OAS will not survive to financially assist our children and grandchildren in the future," adds Breitkreuz.
"Furthermore, if not addressed, OAS has the capacity to undermine Canada's economic position, and has the potential to jeopardize the economies of all western nations beyond this current economic crisis."
A report by Christopher Ragan at McGill, the MacDonald Laurier Institute calculated that "by 2040 Canada would face a $67 billion deficit (in today's dollars) based on current policies and demographic change." OAS will eventually become too expensive and unsustainable.
Breitkreuz says since 2006, the government has worked to assist Canadians as they prepare for retirement by increasing the Guaranteed Income Supplement for the most vulnerable seniors; introducing pension income splitting and increasing the age credit; and introducing new programs.
"When Old Age Security was established in 1952, it was for Canadians aged 70 and older," he adds. "Many changes have been made to OAS over the past 60 years.
"The changes we are hearing about now are ones that will allow OAS to remain in existence for generations to come."
