Won’t someone please think of the elderly

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.

Jonathan McLeod

Jonathan McLeod is a writer living in Ottawa, Ontario. (That means Canada.) He spends too much time following local politics and writing about zoning issues. Follow him on Twitter.

One Comment

  1. I must correct you on the first premise in your article. Prime Minister Harper was not referring to the Canada Pension Plan in his remarks earlier this week in Davos, but to the government funded programs – Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). These two programs are funded from government revenues. the CPP is funded by workers and employers contributions, and by the investment income generated by the CPP Investment Board (CPPIB). According to the Chief Actuary of Canada, the CPP is sustainable for at least the next 75 years of his latest report. The CPP Fund has assets of $152.3 billion, which are expected to grow to $290 billion within the next decade. In his speech the Prime Minister ruled out changes to the CPP, which he said was “fully funded, and actuarially sound”.

Comments are closed.