Mr. Speaker, I rise in the House today to respond this misguided and misinformed opposition motion.
It is unfortunate that the opposition would attempt to confuse Canadians and misrepresent the intentions of our government with its own narrow political gains. This demonstrates how reckless the opposition is with the facts. I am pleased to have this opportunity to set the record straight.
The changes our government is considering have nothing to do with deficit reduction. In fact, the budget will balanced years before any potential changes to OAS come into effect. I will repeat what the Prime Minister, the minister and the minister of state have already said. No current recipient of OAS will lose any of their benefits because of potential changes, not a penny.
It is unfortunate that the opposition is attempting to use these tactics. It demonstrates how out of touch it is with the reality of the demographic challenges that are facing our country.
Let me focus for a moment on the intentions of our government.
Our government wants a strong and sustainable future for Canadians. We believe Canada's seniors are valuable members of our society. They are more than a demographic or a statistic; they are the individuals who built our country. People like Alex Currie or Elsie Cruikshank from my riding in Simcoe—Grey built our country. That is why our government has made seniors a priority in every budget we have implemented.
Since forming government, we have provided $2.3 billion annually in additional tax relief to seniors and pensioners. This has been achieved through pension income splitting and increasing the age credit. We brought in a new guaranteed income supplement top-up benefit to help Canada's most vulnerable seniors, the biggest increase in the GIS in 25 years, and the opposition voted against it.
This is in addition to the 7% increase in the GIS above regular indications between 2006 and 2008. We invested $400 million over the two years for the construction of homes for low-income seniors. In budget 2008 we increased the GIS earnings exemption from $500 to $3,500, and the opposition voted against that as well.
In budget 2011 we provided $10 million over two years to increase the funding to the new horizons for seniors fund. The funding supports seniors to use their leadership, energy and skills to benefit their local communities. We are supporting positive and active aging through collaborative initiatives, age-friendly community initiatives, physical activity tips for older seniors and fall prevention initiatives, all initiatives that my constituents in Simcoe—Grey utilize.
We appointed Canada's first ever Minister of State for Seniors and created the National Seniors Council in 2007 to provide advice to the federal government on matters that related to well-being and quality of life of seniors. We proudly established October 1 as National Seniors Day in Canada.
These actions demonstrate how much we value our seniors, and we are proud of our record.
We will not endanger our seniors' well-being. We want to protect the old age security program and ensure its viability for future generations. That is why we are considering changes.
We are committed to ensuring seniors have the highest quality of life, not just for today but also in a way that will be sustainable for citizens in the future. These are not mutually exclusive goals, these are things done properly and we need to meet both of these goals.
We understand the importance of a secure and dignified retirement for people who have spent their lives building Canada through their hard work, people like John Nell of Collingwood or Tom Walsh in Adjala. The evidence of all the good work our government has done to improve the lives or seniors is evident by improved quality of life of seniors from coast to coast to coast.
The low income rate for seniors has declined dramatically, from 29.4% in 1978 to 5.2% in 2009 under this government, according to Statistics Canada, post-tax low-income cut-offs. The low income rate among seniors in Canada is now one of the lowest among members of the OECD.
However, there is a looming demographic challenge that we can see on the horizon, and that speaks for itself. The World Health Organization says that the average life expectancy in Canada is increasing and is one of the highest in the world, something of which we as Canadians should be proud. It is almost 81 years.
In 2010-11, $35.7 billion in OAS benefits were provided to Canadians. This includes $7.9 billion in the guaranteed income supplement payments for 1.6 million low income seniors. In 2030, the cost to the Canadian taxpayers will escalate to $108 billion a year. A similar trend is observed in the number of recipients.
In 2010, 4.7 million people collected basic old age security. By 2030, the number of people collecting OAS will have nearly doubled to 9.3 million.
This is not a local trend. Canada is not alone in its demographic shift, as population aging is a worldwide phenomenon.
According to the United Nations, in 2005, 10% of the world's population was 65 or older.
By 2025, that proportion is expected to reach about 15%, or slightly more than one in six.
This phenomenon is even more marked in developed countries like Canada. Today, one in seven Canadians is over 65. By 2030, less than 20 years from now, one in four Canadians will be over 65. This new reality will have major repercussions for the labour market.
A smaller number of working taxpayers will be supporting a larger number of OAS recipients. We owe it to future generations to leave both a solid OAS program and an affordable tax burden.
Looking at these facts, the coming challenges are clear. What is not clear is the reason that opposition members are attempting to mislead Canadians about the health of the Canada pension plan. The CPP is directly funded from contributions made by employees, employers and the self-employed. According to Canada's chief actuary, it is sustainable for the next 75 years. The reason the CPP is so robust is that the contributions of individuals are invested over their careers, thereby growing the fund to cover the benefits in their retirement. This is a fundamentally different model than the OAS program. The OAS is funded from general tax revenues on a pay-as-you-go basis. This means that all the benefits are paid for by the taxes collected that year. There is no reserve fund. This is why the worker-to-retiree ratio is so important.
This is not just a problem for Canada. According to the latest OECD report, “Pensions at a Glance 2011”, two-thirds of OECD countries are already increasing statutory pension ages, and will do so in the coming decades to respond to this issue.
We must get things right now to ensure that our retirement security system stays strong and sustainable for generations to come. Thankfully, because of the strong economic leadership of the Prime Minister and the Minister of Finance, we can begin from a position of relative strength and can afford to make changes over time. Younger generations will have the time to plan and adjust. Older generations, who have planned accordingly, will play by the rules of today and will not be affected. We will address this issue in a manner allowing Canadians to continue to enjoy the quality of life we all cherish. To be clear, any changes that our government implements will provide a lengthy period of notice and adjustment.
In summary, our government is reviewing measures to protect Canadians' pensions in the long term. We will implement any changes fairly, allowing significant notice and time for adjustment. We will not follow the opposition and stick our heads in the sand and pretend that we are oblivious to the obvious problems of an aging society in Canada. For these reasons, our government will be voting against this motion, and I urge all members of the House to do exactly the same.