Raising eligibility age would raise other costs
The federal government hasn't said it plans to raise the eligibility age for Old Age Security to 67, but even speculation that they might has opponents of the idea already firing back - and offering some good arguments.
Those against making Canadians wait an extra two years to start claiming OAS payments warned Wednesday of the domino effect that would follow. They point out it will add to the cost of other support programs for low-income seniors while downloading a further burden onto provinces and municipalities.
Quebec's employment minister, Julie Boulet, said in a Canadian Press story Wednesday that raising the OAS eligibility age would cost her province "tens of millions of dollars" in welfare payments to low-income seniors between ages 65 and 67.
Pauline Marois, leader of the Parti Quebecois, said, "You know very well that if he goes ahead with this it will have an impact on provincial budgets."
How can it not? Cuts at the federal end of the ladder usually wind up trickling down, first to the provinces, and if the provinces can't come up with the money, the problem filters down to municipalities. If the municipalities don't have the money, it ends up affecting people. If it means people have to do without some arts and culture programs or energy-efficiency retrofits, that might not seem so harsh. But if it means people don't have enough to eat or can't find affordable housing, that becomes a more serious matter.
The talk around pension reform and what the federal government might or might not do is based on the view that Canada's pension system simply isn't sustainable over the long haul. "In order to have a system that's still in place and viable and sustainable 10, 20, 30 years from now, we need to make changes today," Government House Leader Peter Van Loan said Monday.
Just what those changes will be isn't known yet, but even pension and economic experts warn that raising the OAS eligibility age would bring with it some major repercussions.
Andrew Jackson, chief economist for the Canadian Labour Congress, said in Wednesday's Canadian Press story that an OAS age hike would produce "a very significant increase" in poverty among seniors. That, in turn, would increase costs for provincial governments in the areas of social assistance, disability and drug programs.
Interim Leader Bob Rae pointed out that eligibility for the Guaranteed Income Supplement is linked to OAS eligibility, and qualifying for the GIS or OAS is tied to qualifying for provincial drug plans and other provincial and municipal support programs for seniors. So any savings made with OAS will be eaten up through more GIS payments. If the GIS payments were to be squeezed, too, the result would be an increase in the number of seniors living in poverty.
Pension consultant Bob Baldwin, a former adviser to the Ontario Expert Commission on Pensions, noted, "I don't regard it as wrong-headed to ask a question about the age of eligibility for these benefits but I think that a lot of work is required to make sure you don't do any more damage than necessary."
That's the key word: damage. If any damage results from pension reforms, it will be Canadian seniors, one of society's must vulnerable sectors, who feel it.
If pension changes are needed, they must be done wisely.
Comment on this editorial online at www.lethbridgeherald.com/
opinions/.