The cost and savings of OAS

by Aaron Wherry

Kevin Milligan considers the ramifications of changes to Old Age Security.

By 2031 — at the peak of the baby-boom retirement wave — the share of GDP spent on Old Age Security will rise to 3.14 per cent, for an increase of 0.73 per cent over today’s level. Now, an increase of 0.73 per cent of GDP cannot be ignored, but neither is it disastrous. To provide some scale, David Dodge and Richard Dion project that spending on health will grow from 12 per cent to 18.7 per cent of GDP by 2031, for an increase of 6.7 percentage points. In the fight for government spending dollars in 2031, health is the elephant and the Old Age Security pension is the mouse…

In research in progress, I am finding that around three quarters of those not working in the years just before reaching age 65 have other sources of income sufficient to get them out of low-income range. Of course, the flipside is that one quarter of them do not. If the retirement age increases, these Canadians may suffer as they wait for their public pension cheques to begin flowing.




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The cost and savings of OAS

  1. This comment was deleted.

    • A lot of social programs came into being because of the devastation caused by the Depression….and their parents were well off in the 20s.

      And after WWII, things like the GI Bill enabled a huge step forward.

      The youngest boomers are now 47.

      • And Stephen Harper is the first baby-boomer to become prime minister of Canada – as well as being the first prime minister of our history to have been born a Canadian citizen.

        • Other than Kim Campbell.

        • PET, Jean Chretien and Paul Martin were all born in Canada. Do they not qualify Lorraine?

          • I guess they must have been considered to British subjects.

          • Actually, the term “Canadian Citizen” was used in the Immigration Act of 1910 and included persons born in Canada.  The Citzenship Act, which came into effect in January 1947, incorporated the previous immigration acts and a number of other statutes and orders in council, but did not really create the notion of “Canadian Citizenship” out of thin air. Canadian passports continued to state that “a Canadian Citizen is a British subject” until 1977.

  2. A quarter of them eh…well there’s the rub. This move while not unduly inconveniencing 3/4 of OAS recipients will however hurt the most vulnerable…guess they can eat cat food for a couple of years[ not kidding either. Pensioners in UK were found resorting to this - most likely during the Thatcher years too]

    As Gladwell pointed out many many times this kind of shoot all the dogs cuz some of em got fleas approach is flatout dumb and unfair to boot.

    • Harper is already retreating on this….apparently for all his ‘Canadianness’ he didn’t know OAS is a third rail.

    • Hey, by the time one-quarter of seniors are in dire straits, corrections will be a growth industry under the Cons’ law ‘n order regime, and there’ll be debtors’ prison to accommodate the undeserving poor.

      • Shush…don’t say that too loud, everybody will want in. Other than 6/49 a nice cell and three squares a day is my retirement plan if my wife gets sick of me :)

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