Conservative budget expected to raise retirement age, herald in spending cuts

It’s budget day on Parliament Hill.

The Globe and Mail reported this morning that the Conservatives’ first budget as a majority government will raise the age of retirement from 65 to 67, a move anticipated since Prime Minister Stephen Harper gave his keynote address to the World Economic Forum in Davos, Switzerland, telling the crowd that Canada needed to make changes to its Old Age Security system so that it will remain sustainable. The change will reportedly be phased in over a number of years, meaning there will be a generational divide with younger taxpayers receiving their benefits later.

Another thing to watch for today is cuts. Treasury Board president Tony Clement—the man embroiled in the G8 pork-barreling scandal in his Muskoka riding—has been tasked with finding ways to shave off spending at every federal department. As the CBC reports, the Harper government expects to cut some 30,000 public service jobs over the next three years, but is hoping that most of those will be through attrition.

Total annual savings from this budget are expected to be in the range of $4 to $6 billion, as the government asked each federal department to submit spending cut proposals between five and 10 per cent. The cuts in today’s fiscal plan are expected to fall somewhere in the middle.

Yesterday, when buying the customary new pair of shoes ahead of today’s budget announcement, Finance Minister Jim Flaherty insisted that the cuts in his budget are not draconian. “The majority of the spending review reductions relate to back office operations of government,” he said, quoted by the Toronto Star. 

Finance Minister Jim Flaherty is scheduled to present the budget in the House of Commons today at 4 p.m. EST.