Thank you very much, Mr. Chair, and thank you of course for the invitation to speak to this very important study on poverty reduction.
For those of you who are unfamiliar with the Canadian Taxpayers Federation—although I hope this committee is familiar by now—we are a federally incorporated not-for-profit citizens group with more than 90,000 supporters nationwide. We have three key principles: lower taxes, less waste, and accountable government.
Given those principles, I want to focus my remarks today on the third subject under the study, and echo in large part the remarks made by Mr. Brain, talking about the tax-free savings account, the Canada Pension Plan, and old age security.
It's fair to say that we at the CTF are big fans of tax-free savings accounts. We believe incentivizing savings in a way that allows individual Canadians and their families to direct money and to structure their savings in ways that can be tailored to their own individual circumstances and preferences is better than a one-size-fits-all approach. We were therefore very disappointed to see that the government decided to reduce the annual contribution limit from $10,000 to $5,500 per year. Like Mr. Brain, we would urge them to strongly consider restoring this limit to $10,000 in the forthcoming budget.
It was also especially disappointing to see that change in light of some of the subsequent steps taken by the government to increase CPP premiums. Again I have to echo Mr. Brain on this. Concern for seniors in poverty is of course a legitimate goal, but the question is whether CPP is the right tool to address a very particular demographic. If we are talking about people who do not have the means to save and are not paying into CPP in the first place, an increase in the generosity of CPP will not assist these people. The correct tool to address that problem is indeed old age security or the guaranteed income supplement.
If we are talking simply about people who have the means to save but choose not to save, it's an open question as to whether the government is in the position to second-guess whether these people would prefer to spend more. For example, people in my situation, with a young family, may need to spend more money, whereas in old age they may be more willing to cut back.
Finally, I have a few comments with respect to the old age security. We were also disappointed to see the government decide to return eligibility to age 65 from age 67. It's fair to say that we're not the only ones who feel that way. The finance minister himself offered a whole book on this subject before he became finance minister and in that book recommended moving the old age security up to age 67. That is a prudent decision that would reflect the growing lifespans of Canadians and would save Canadian taxpayers tens of billions of dollars. The decision to revert to age 65 will, down the road, become a considerable hardship to younger people, who of course are going to be the ones on the hook for extra costs.
I think it's important to remember the context in which these programs, CPP and OAS, were introduced. OAS was introduced in 1952, CPP in 1966. At that time, the average lifespan for Canadian men was 69 years of age and for women 75. If you fast-forward to today, it is now 79 years for men, a full decade longer; and 83 for women, almost a full decade longer. That's of course a reason to celebrate—Canadians are living longer—but there is going to be an obvious impact on the sustainability of programs designed to support people in retirement.
That is to say, at the time they were introduced, OAS and CPP were designed to support people for perhaps four to five years in retirement. Now those programs have to support people for 10, 15, or 20 years and sometimes longer, so the programs themselves are much expensive.
Finally, it's important to point out that the demographic trends in this country are placing a heavier and heavier burden on the people paying. At the time these programs were introduced, fifty years ago, there were eight working Canadians for every retiree. By the year 2000, it was down to five and a half workers. We're now at about four workers per retiree, and we're closing in on under three by 2030. We can see what is coming down the road here. In order to adjust in a way that's fair to people, so that changes can be phased in over decades and not suddenly, moving OAS from 67 back to 65 was, frankly, a step in the wrong direction.
I'll leave it there, Mr. Chair, and I'll be happy to take questions.