Mixed reaction to PM's plan to keep Old Age Security cutoff at 65
Sonja Puzic and Josh Dehaas, CTVNews.ca
Published Thursday, March 17, 2016 9:52AM EDT
Last Updated Thursday, March 17, 2016 6:43PM EDT
Prime Minister Justin Trudeau's announcement that next week’s federal budget will cancel plans to raise the cutoff age for Old Age Security benefits to 67 is getting mixed reviews.
Trudeau told an audience in New York Thursday that the budget will keep the eligibility for OAS benefits at 65, scrapping the previous Conservative government’s plans to change it to 67, starting in 2023.
Trudeau called the Conservatives' move a simplistic solution, saying some people choose to work into their late 60s, while others are ready to end their working life at 65.
"Obviously, for someone who's worked as an investment banker or as a lawyer all their life, 65 is not necessarily an age where they need to retire... Anyone who has worked with their hands as a labourer... and has been in a much more physical job, once you reach 65... there are real challenges," he said.
The Conservatives made the change in 2012 after calculating that OAS costs would nearly triple, from $36.5 billion to $108 billion by 2030.
The OAS is a payment of up to $570.52 per month, depending on income.
Wanda Morris, from the Canadian Association for Retired Persons (CARP), dismissed suggestions that reverting back to 65 will bankrupt the country, telling CTV Power Play it’s an important tool to help alleviate poverty.
Morris said Canada is facing a “retirement security crisis” and that OAS helps some seniors attain “the occasional luxury” while for others it helps cover “basic necessities.”
Aaron Wudrick from the Canadian Taxpayers Federation said he sees Trudeau’s move as “pandering to the people in the short-term that’s going to have long-term consequences.”
He said OAS has become unaffordable because it was devised at a time when 65 was getting close to the end of most people’s lives.
Old Age Security dates back to 1927 but was only available to the poorest seniors over age 70. It was expanded to cover seniors 65 and above in 1952.
Life expectancy at birth grew from 67 in 1951 to 82 in 2011, according to Statistics Canada.
Canada is not the only country to rethink the retirement benefits. Australia’s retirement age will change from 65 to 67 in 2023, and rise gradually to 70 by 2035. The United Kingdom’s cutoff will go from 65 for men and 60 for women to 66 for all in 2020, and 67 for all by 2028.
Trudeau also offered a few other hints about Tuesday’s budget in his conversation with Bloomberg’s editor-in-chief John Micklethwait.
Trudeau said his government’s plan to boost the economy is “much more modest” than the Conservatives’ stimulus spending following the 2008 global recession.
He also said that when governments try to “shovel money out the doors,” it doesn’t always get spent on the right things. This time, the goal is to make “responsible” investments, he added.
The first couple of years of the Liberals’ plan will feature “unsexy things,” such as infrastructure maintenance and upkeep, which won’t result in ribbon-cutting photo-ops, but are “desperately” needed, Trudeau said.
Despite the lack of economic growth in recent years, Trudeau said that Canada has “a lot of stability that other countries don’t have.” He cited a low debt-to-GDP ratio, and the country’s diversified workforce.
Trudeau stopped by the Bloomberg offices Thursday as part of his trip to New York City, during which he visited the United Nations to discuss women’s rights and received a gender equity award on Wednesday night.
During the Bloomberg interview, Trudeau was also asked about the possibility of Republican front-runner Donald Trump winning the U.S. presidential race and how that will affect Canada-U.S. relations.
Trudeau responded by saying that the “incredibly unique relationship” between the two countries goes beyond its leaders and added that he has “tremendous confidence” in American voters.
Asked what he and Trump could have in common, Trudeau said: “A desire to see Americans do well.”