This article was published by The Chronicle Herald on March 29th 2012. To see this article and other related articles on The Chronicle Herald website, please click here
Canadians apparently have to get used to a more Conservative way of looking at the world.
Rather than big programs, the federal government is demonstrating its view that government needs to play a smaller role in everyone’s lives. And we had better get used to it.
One example is the changes to Old Age Security introduced in Thursday’s budget.
It is one thing for someone to choose to work past age 65 because they want to shore up their retirement nest egg, but Canadians who are now 54 and younger may be forced to work past the normal retirement age because they won’t have the Old Age Security to supplement their retirement income until they reach 67.
The maximum Old Age Security payment this year is $6,368.
In Thursday’s budget, the government said it will gradually increase the age of eligibility for Old Age Security and Guaranteed Income Supplement benefits from 65 to 67 starting in April 2023, and the changes will be fully implemented by January 2029.
Considering the population in the Maritimes is the oldest region in the country and the poorest, it is likely that more people in this part of the country will be feeling the detrimental effects of the changes to the Old Age Security and Guaranteed Income Supplement rules than any other part of the country.
While working a couple of more years may not mean a lot to someone working in an office, those who work in physically demanding jobs will probably feel the effects of the change more than others. In the future, the working poor, if they retire before 67, may be forced to collect welfare from the provincial government as a means of supplementing their Canada Pension Plan benefits.
The federal government says it plans to provide supplemental funding to help provincial governments assist people adversely affected by the changes to Old Age Security and Guaranteed Income Supplement, but those figures haven’t been worked out yet.
Meanwhile, there is also a debate whether the changes are necessary, with Liberals and NDP representatives suggesting there were other ways the government could have saved money.
There are also changes introduced in the budget Thursday that have a more immediate effect on Nova Scotia.
There is a two-year scheme outlined in the budget that is designed to link unemployed people to available jobs. That means Nova Scotians, now able to collect employment insurance in high unemployment areas, will be pushed to come to Halifax or move to Alberta in search of employment.
This is particularly bad news for rural Nova Scotia, considering there is already a major urbanization going on which is having a negative effect on Nova Scotia’s rural economy.
With more young people leaving the province in search of employment even before the government’s plan was revealed, Nova Scotia is facing a problem of having too many old folks and not enough young people available to work and pay the taxes.
The details of the government’s plan have not been revealed.
Irving Shipbuilding, which has a $25-billion contract to build ships for the Royal Canadian Navy, may also feel the effects of another of the government programs introduced in the budget. The federal Temporary Foreign Worker Program is designed to match qualified Canadian workers with vacant jobs before making them available to foreign workers.
Irving is expected to be recruiting foreign works to fill openings at the Halifax Shipyard and elsewhere in order to meet the specific labour requirements of the shipbuilding contract.
Another budget measure may affect Nova Scotia’s important mining sector with the phasing out the corporate tax credit for mining pre-production and exploration spending.
Nova Scotia’s energy sector is also taking a hit.
The government says it plans to phase out the 10 per cent Atlantic Investment Tax Credit for oil and gas and mining activities. The credit for oil and gas or mining assets will be 10 per cent before 2014, five per cent for 2014 and 2015, and eliminated after 2015.
In a step that should assist backers of the Muskrat Falls hydroelectric project in Labrador, the government proposes to extend the Atlantic Investment Tax Credit to certain electricity-generating equipment and clean-energy generation.