Here is the final third of the prepared text for her remarks, with all the usual caveats about checking against delivery (a full video of the speech hasn’t yet appeared online).
And now, the favourite topics of late, CPP and OAS.
The Canada Pension Plan is based on contributions. You work – and you and your employer contribute. The short story is that CPP is rock solid, based on the Chief Actuary, for at least 75 years. It’s an international model for sound structure, governance and long-term stability. Major changes to the CPP were made in the late 1990s to align it with the new realities of an aging population. That’s why it’s in such healthy shape.
The Old Age Security program however, is a very different story. OAS is available to all Canadians, funded 100 per cent by tax dollars. There is no reserve fund. There have been no such adjustments. It’s ticking along as if things haven’t changed demographically in fifty years.
People are living longer however and they are collecting OAS benefits over a longer period of time. A person turning 65 today can expect to receive OAS for 20 years – 4 years longer than in 1970. Add to that, the baby boomers are retiring in growing numbers. So we will have more people, collecting longer. As a result, the total cost of benefits will be increasingly unsustainable for tomorrow’s workers and taxpayers.
And it’s the next generations of Canadians who will have to shoulder the burden. The next generations who will have their own families to raise, their own mortgages to pay, their own student and household debt to manage.
OAS expenditures – which are the largest single transfer we pay to individual Canadians – are projected to increase from $36.5 billion a year to $108 billion a year by 2030. So the cost is going up dramatically – while the supply of workers who keep our economy growing and our tax revenues strong, is shrinking proportionately.
Ladies and gentlemen, inaction is simply not an option. Something must be done.
Nearly every OECD country has taken steps to ensure the sustainability of their public pension system, including the United States, Australia, United Kingdom, France, Germany, Sweden, and Japan. Whatever the Opposition may believe, this is not a crisis that we invented. Our population is aging, demographics are shifting. And it’s real.
It is clear that they are not interested in facing reality. It is clear that they are not interested in proactively discussing Canada’s longer-term challenges and opportunities. Their irresponsible approach to Canada’s finances would put many cherished programs at risk. As one editorial recently stated, the Opposition parties’ efforts to panic Canadians are as disingenuous as they are dangerous.
So let’s be frank.
We cannot allow ourselves to be pegged into a situation where we are faced with a choice between the country’s financial security… and our commitment to aging Canadians who have worked long and hard to build this great nation. This government will not allow that to happen.
There have also been many debates on the notion of sustainability.
Let me put that in a new context today. Everything is sustainable… if we selfishly choose not to think beyond our generation. Everything is sustainable… if we pretend other programs won’t be affected by a greying Canada. Everything is sustainable… if we decide to ignore a shrinking tax base to pay for our programs. Everything is sustainable… if you believe the solution is to massively increase taxes and incur huge structural deficits.
By that definition, we could say that despite their current predicaments, the programs of many of our European friends are ‘sustainable’. I don’t think I need to continue. The point is clear.
Government debt and inaction and complacency can choke an economy, as Canadians can see by looking abroad. Thanks to the strong economic leadership of our Prime Minister and Minister of Finance, we have the financial independence to make choices on our own terms. However, I cannot stress enough that if we want to continue to have choices, we need to start making responsible and prudent decisions today.
I’m sure many of you have heard this from me many times over the past few weeks, but I want to reinforce – again – that any changes being considered will not cost current seniors a penny. I challenge you to walk away today… and tell your older friends and family that I personally assure there will be no changes for seniors currently collecting benefits. Nor will there be any impacts for anyone close to retirement. Any necessary changes will be made with a substantial notice period, allowing plenty of time for Canadians – some of you here today – to adjust your retirement planning accordingly and prepare for the future.
Let me confirm right now that our Government will ensure the security of retirement benefits for Canadian seniors and for future generations. We owe it to future generations to leave a solid OAS program that is affordable and that reflects the demographic changes happening in our country.
I think it’s also important to bluntly say that we would not be considering change for the sake of change. We are considering change because it is in the best interest of Canadians, their families – and their futures.
This is a topic of great interest to Canadians. I’m hearing it loud and clear. Yet I have to tell you, that Canadians get it. Once they have a chance to absorb the information and realize just how different our country and our labour market will look in very few years… they understand.
Of course, I’m also being asked regularly for details, on what we’re planning. Although there is no policy yet to announce, I can tell you that the upcoming Budget will ensure steps to protect retirement income. It will also ensure that there are no cuts to the current benefits for seniors.
As our Prime Minister has said, our Government will make the changes necessary to sustain economic growth, job creation and prosperity. Now is the time for leadership to ensure Canada is indeed a country for all ages – for youth, for seniors, for our newcomers… and all of us in between.
Yes, we have our challenges. But just remember that nearly 150 years ago, we still had challenges – just different ones. Because of the commitment and vision of a small group of people, Canada became a country. Fast forward to today, and this country is now a world leader. To me, it’s the very best place in the world. Here you are given opportunity, freedom, the chance to work hard, raise a family and make a better life. And now we must look to tomorrow and prepare for it.
Our Government will make sure Canada is left a better, stronger place. Both for Canadians today and for the generations coming behind us.