AFTER I write a column my readers let me know whether it was a hit or a miss.
In my last column I suggested that recent changes to Old Age Security (OAS) had more to do with ideology than facts and that was a miss with a lot of my readers.
Many of the people that I have spoken with over the last few weeks believe that seniors are better off than ever before and that our population is too old to sustain programs like OAS.
And, like the government, they are convinced that unless we take action now to curtail spending, our retirement income system won't be there for future generations.
There is no question that government-financed income supports like OAS and the Guaranteed Income Supplement are expensive.
Those costs are scheduled to rise from the current $36 billion to approximately $108 billion in 2030 once inflation is factored in.
The question is can we afford it?
Most of the people I heard from said no. Several readers drew my attention to countries like the United Kingdom, France, Germany, Greece and Italy, which have all raised their eligibility requirement to receive OAS. Are we really that different from our European counterparts? The short answer is yes.
I am looking at some research done by the Canadian Association of Retired Persons (CARP) in response to questions raised around the sustainability of Canada's Income Assistance Programs.
The good news is that Canada's population is actually younger than most of those OECD countries and the ratio of retired to working Canadians is more favourable as well. And, we spend less as a share of GDP on public pensions compared to our European cousins. A lot less.
The OECD average spending on public pensions as a percentage of GDP is seven per cent. In Canada the figure is 2.47 per cent, in France it's 12.5 per cent, and in Italy it's 14 per cent.
Better yet, that GDP figure for Canada tops out at 3.1 per cent by 2030 - then it begins to decline.
Other countries have a problem funding their income support programs, but we don't. The biggest cost to government going forward isn't retirement benefits, it's health care and the government has already acted on that by pegging future increases to economic growth plus inflation.
Are seniors really doing better than ever before? Compared to the situation we faced 20 years ago, almost certainly. But today, almost 300,000 Canadians still live in poverty and those numbers are growing. Between 2006 and 2009 nearly 128,000 more seniors (mostly women) became low income.
It's true that the changes to OAS won't affect seniors already collecting benefits and that there is ample time for many approaching retirement to begin to plan for these changes.
But here is the concern: the majority of seniors are women and more than 30 per cent of single women between the ages of 45 and 64 are low income. For many of these women the combination of OAS and the Guaranteed Income Supplement (GIS) is the deciding factor in preventing poverty.
There is a slew of research, much of it from the government side, that suggests that our retirement income system is affordable and that changes to the OAS eligibility benefit will hurt those who need the money most.
So, given that, why make the changes?
I don't have an answer.
Tom Carney is the executive director of the Lionsview Seniors' Planning Society. Ideas for future columns are welcome. Contact him at 604-985-3852 or send an email to firstname.lastname@example.org.
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