PM’s new policy would force up to 50,000 to live in poverty for two more years

In his speech at Davos Switzerland, Prime Minister Harper set the tone for the debate on Old Age Pensions using language that we have not heard before. He said that “our demographics constitute a threat” and labelled Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) the “elements of the system that are not funded”.

Just to be clear, what he meant by “not funded” is that OAS and GIS are supported by income tax revenues while the CPP is funded through payroll taxes. The idea that our “demographics” – presumably the aging of the population – poses a threat means that seniors will comprise a larger portion of the population in the future.

How different things were just a few short months ago before the federal election. On March 28, 2011, Mr. Harper kicked off the Conservative campaign with something called the “Family Tax Cut”, a $2.5 billion pledge to allow parents with non-working spouses to split their income with their partners but only when the deficit is eliminated.

Ten months later, the re-elected government of Mr. Harper has now found a new way to bring down the deficit to hasten the implementation of his signature campaign promise: by rebranding seniors’ benefits as an unfunded threat, as he put it in Davos, to “the social programs and services that Canadians cherish”.

Media stories have made clear that the move to raise the age limit for eligibility to OAS and GIS would be disproportionately borne by provincial social assistance programs and in particular, by poor women, persons with disabilities, immigrants and newcomers. Women pay less into CPP – which may become their only form of retirement income – while immigrants and newcomers are eligible for reduced OAS and GIS for which they would be forced to wait longer for   reduced amounts.  Persons with disabilities must often rely on reduced income.

Contrast that with the promised tax break that would   disproportionately funnel billions to those upper income Canadians who can afford the choice of a non-working spouse.

But now that we have established the Prime Minister’s favoured constituency and his preferred method of getting unneeded benefits to them sooner, let’s spend a minute or two on what we stand to lose in the bargain.

By providing OAS and GIS at age 65, Canada has greatly reduced the incidence of poverty among seniors. By moving the age of eligibility for OAS to 67, absent any other measures, the Conservative government will place a whole new age cohort into risk of poverty.   My own estimate is that almost 50,000 social assistance recipients, most of them persons with disabilities, would be forced to live in poverty for up to two more years.

Clearly, if the age threshold for OAS is to be raised to 67, we must do more to ensure that the 65 -67 age cohort escapes poverty. Perhaps then, some higher income families with non-working spouses could wait just a bit longer for the extra money they have demonstrated they don’t require.

– John Stapleton is a social policy consultant, you can read his various publications and read his full bio at: http://www.openpolicyontario.com/

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