There are three main factors behind the increase in elderly benefits. The first is the recent top-up of 10% for elderly benefits, for those aged 75 and older. That's a one-off. The are two other main factors. First, there is demographic growth. As Canada's population ages, not only are there more seniors, but they represent a larger share of the Canadian population. The second main factor is inflation, because these benefits are fully indexed to inflation. When there is inflation, these benefits increase. They increase with population; they increase with the level of prices; and they also increase as a result of discretionary policy decisions.
They're accommodated within the federal budget through increased government revenues. In the absence of savings elsewhere, they either increase the deficit or crowd out other types of spending. What we are seeing for the next couple of years is that these will grow at a relatively solid pace, but not at a pace that will make this unsustainable at the federal level.