To the Editor:
Prime Minister Stephen Harper has renewed a perennial debate about when Canadians should retire. According to media reports, Harper has in mind changes to the Old Age Supplement (OAS) and the GIS (Guaranteed Income Supplement) that would raise the eligibility age from 65 to 67.
Much of the reaction has focused on how such changes would affect public finances and the Canadian economy, essentially asking whether the benefits of reducing the cost of old age income programs, plus the increased labour supply, justifies making older Canadians "worse off."
But that approaches such changes exactly backward. Such reforms, far from taking something away from seniors, are a tiny step in reversing decades of bad policy that has marginalized older Canadians, damaged their health and harmed their morale. Raising the age of eligibility is emphatically not a matter of imposing costs on seniors in order to benefit the rest of the population. It is an exceptionally pro-seniors policy to reduce the incentives to stop working at 65.
There was a time when age 65 and retirement were closely linked for a compelling reason. By then a life of labour had left the average worker depleted. A few short years of decline were all that they could expect before death. A Canadian male born in 1966, when the Canada Pension Plan was introduced, would only expect to live to age 68 or so. Today it is 79.
Age 65 and the moment when one can no longer reasonably be expected to work have long since parted company. We live longer and in better health. Age 65 is no longer the exhausted tail end of life.
Over four-fifths of Canadians say they would like to continue to work even if they had enough money to retire. And nearly half of Canadians of working age already expect to work beyond the age of 65, and not just for economic reasons, according to a survey done for one financial institution: Future retirees are coming more and more to realize that work (although not necessarily any particular job, a distinction many people seem to have difficulty grasping), is closely related to happiness.
Put this together with the evidence that older people live longer, healthier and happier when they continue to work and you have a compelling case that our dogged insistence on 65 as the age to encourage retirement has been a cruel policy that has created increasing unhappiness and ill-health for older Canadians. Encouraging retirement at 65 has pushed these costs onto seniors for the benefit of our younger population looking for work. Benefit eligibility at 67 is, therefore, far too timid a reform. A pro-seniors policy would be far more ambitious, looking at 70 or even 72. Even then Canadians would enjoy a longer period of work-free retirement than in 1966.
Canada must, of course, continue to look after those incapable of working, whatever their age. Changes must be phased to allow for adjustment in retirement planning. Retirement must go from radical overnight transformation to long slow transition, from full time to part time, balancing work and leisure and matching effort to capacity. And we should use some of the savings from reform to improve retirement conditions for those who do reach the age and state of health where work is no longer possible.
Sure, such changes will help public finances and ease the looming labour shortages that darken our economic future. But those are just side benefits. The chief beneficiaries will be older Canadians themselves.
Brian Lee Crowley, Managing Director, Macdonald-Laurier Institute.
