With increased deficits and other fiscal demands, the Canadian government is ready to make some serious changes to the Canada Pension Plan. One potential change that has been floated is to raise the age of eligibility from the current 65. Writing at The Progressive Economics Forum, Andrew Jackson suggests that this isn’t the greatest idea:
Raising the retirement age from age 65 to age 67 or higher would impact all future seniors, but would especially impact those who would qualify for the GIS supplement. Many older workers, especially the single near elderly, already face very high rates of poverty.
It is often argued that we have to raise the retirement age because Canadians are living longer. But raising the retirement age by 2 years will especially impact low income older workers. People in the bottom 20% of the workforce pass away 5.6 years earlier than those in the top 20%. Half of all low income men will collect an OAS/GIS cheque for only 10 years.
It’s pretty common these days, at least in Canada, for politicians to court (read: pander to) voters at or near the retirement age. It was a common tactic in the last federal election as each party put forward proposals to protect this endangered group.
One of my co-contributors at the Commons, Max Fawcett, took issue with this phenomenon last year:
Senior citizens, after all, face the lowest levels of poverty of any group in Canada, lower than women, lower than visible minorities, lower than the disabled, and even lower than working age population. In fact, while Canada’s record on child poverty remains inexcusably poor – in a recent OECD survey the child poverty rate in Canada placed the country 13th among seventeen industrialized nations – it has done a commendable job of reducing the incidence of poverty among senior citizens. The poverty rate for households headed by a person 65 or over dropped from 28.4 per cent in 1973 to just 5.4 per cent in 1997, an achievement that has led Lars Osberg, an economist at Dalhousie University, to argue that it constitutes the major success story of Canadian social policy in the 20th century.
I won’t say that these two opinions are irreconcilable, but Max lashes out quite nicely at the “pension pushers”.
Update: In the comments, I am corrected that it is not the age for CPP eligility that is being raised, but for other, government-funded assistance programs. I apologize for the error.