Why raising the OAP to 67 doesn't make sense
Ellen Roseman, The Toronto Star
Prime Minister Stephen Harper raised eyebrows with a speech last week that fueled speculation he plans to lift the eligibility for Old Age Security to 67 (from 65).
Harper’s argument that deep cuts are required to keep the program afloat deserves closer attention, even though he’s been backpedalling ever since.
I have two points to make:
— There is nothing new in the numbers he quotes about OAS costs rising as baby boomers retire.
— There are ways to reduce costs that won’t incense Opposition parties and organized seniors’ groups.
Let’s start with the statistics, which show that taxpaid pensions for people over 65 will triple to $108 billion by 2030 (from $35.6 billion in 2010).
The Conservative government seems spooked by this figure. But why should it be?
When looked at in the context of Canada’s growing economy, the cost of supporting the demographic bulge is not nearly as scary.
As a percentage of our gross domestic product, Old Age Security will rise to 3.1 per cent by 2030 (from 2.3 per cent in 2010) — before declining again after the boomers retire.
To read the full story: http://www.thestar.com/article/1124518--roseman-how-to-cut-pension-cost-without-hurting-everyone