Madam Speaker, I will be splitting my time with the member for Souris--Moose Mountain.
I stand here in the House to provide some clarity on a significant demographic shift that is happening in our country. I will provide some detail on that in a moment, but first let me be very clear with the House and with Canadians. Over the past few days, the opposition has created, and indeed perpetuated, fear and confusion among Canadians. They are intentionally misleading Canadians, and particularly our seniors, about the old age security program and I would like to put an end to that today.
Let me confirm right now that our government will ensure the security of retirement benefits for Canadian seniors and for future generations. Specifically, as I have said in the House many times, seniors who are currently receiving benefits will not lose one cent because of any potential changes. Any changes to OAS will be implemented gradually and with substantial notice for all concerned.
We will not jeopardize the well-being of our seniors. We want to protect the OAS and ensure that it is sustainable for future generations. Therefore, we are changing some measures in order to protect Canadians' pensions in the long term.
Let me put this in context. It is no secret that Canada's population is aging and that this is going to bring significant changes to our society. These are changes that we need to think through and that we need to prepare for right now.
Why is Canada aging? There are two main factors. First, our birth rate is low. In fact, it is less than the level needed to replace ourselves. At the same time, average life expectancy for each individual has gone up. The average Canadian can now expect to live to 81 years old.
When it comes to longevity, our country ranks among the world's leaders. We are living longer than ever and we are enjoying more years of good health as we get older. However, with fewer people being born and more people living longer, the age structure of our population is being significantly reshaped.
By 2030, 25% of the population will be over 65, compared to the current 14%. This new reality will have a serious impact on the labour force. With fewer workers, our productivity will decline, which could slow down our economic growth.
With fewer workers to pay taxes, we will also face a shortfall in revenue. A shrinking tax base means it will be harder to finance our unfunded social programs. Looking to the longer term, that means some programs, like OAS, will soon become too expensive and unsustainable if not addressed.
This is not a short-term problem, nor does it have anything to do with deficits or deficit reduction. Frankly, the issues with old age security sustainability will come into play long after we have achieved balanced budgets, but they are tomorrow's challenges that need to be addressed today.
Any important decision needs to be assessed carefully and implemented responsibly. We all make important decisions every day, at home and at work, for ourselves and for our families. Some can be made at lightning speed, reactively, and they really do not make a dent in the grand scheme of things, but others take longer to make. We need to look at all of the angles and assess all of the facts. Some decisions cannot be made in a snap because the future is involved. We have to plan or invest for those moments down the road.
As a government, when we talk about potential OAS changes, we are talking about prudent planning for the future, for the long term. It is one of those decisions where we will examine all of the angles and assess all of the facts. In doing so, our job is to take time today while we still can to think about how we can introduce changes gradually that will improve Canada in the future.
It is our job to figure out how to ensure the sustainability of programs that Canadians cherish, like OAS. The opposition, of course, has the luxury of ignoring these looming challenges, but our government does not. We will not sacrifice seniors' benefits in the future for the sake of recklessly keeping our head in the sand, as the opposition would have us do.
I promised some detail when I started my speech this morning. I would like to paint a picture of the present versus the future.
Today there are four working Canadians for every person who is retired. By 2030 that will be cut in half to only two working Canadians for every retiree. With fewer citizens working there will be less revenue to invest in programs for retired Canadians. Here is the kicker: the estimated cost of OAS will nearly triple. Half the people will be paying three times the price.
I want to pause at this point to make an important distinction between OAS and CPP, the Canada pension plan. When I talk about retirement benefits today and their cost, I am not referring to the Canada pension plan. The CPP is 100% funded by contributors. It is paid by employers, employees and the self-employed through premiums.
In the 1990s, important changes were made to the CPP to address the potential impact of the aging population. Now it is secure and it is sustainable; in fact it is rock solid for at least 75 years.
In contrast, OAS is 100% funded by tax dollars on a pay-as-you-go basis. There is no reserve; there is no fund. Since it was created in the 1950s, the OAS has never been adjusted to reflect our aging population, nor has it been updated to incorporate the fact that people are living longer and collecting OAS for a longer period of time.
It has not been changed to address the fact that very soon there will be an unprecedented number of Canadians retired and eligible for OAS. The outdated nature of the OAS program becomes important when we return to the point that taxpayers fund it each and every year.
This means that today's Canadian workforce pays for today's OAS recipients. And tomorrow's Canadian workforce will pay for tomorrow's OAS recipients.
Today, OAS is the largest single transfer that we make to Canadians, at around $36 billion a year. By 2030, it will be $108 billion, nearly triple the cost. The number of basic OAS pension beneficiaries is expected to almost double. The per cent of GDP expenditures will increase to 3.14%, in 2030, accounting for billions of dollars in increased costs. By that time, as I mentioned, we will have fewer Canadians contributing to the tax base and active in the workplace, compared with those retired. With those dramatically changing costs and statistics, the current OAS program will present a tremendous burden on tomorrow's workforce and taxpayers if it stays the way it is.
Our government holds the responsibility for protecting future generations, whatever the opposition may believe. This is not a crisis that we invented. I am very disappointed that its only apparent interest is in deliberately misleading and confusing Canadians on this issue. It is clear that the opposition is not interested in facing reality. It is also clear that it is not interested in proactively discussing Canada's long-term challenges and opportunities.
The opposition's irresponsible approach to Canada's finances would, quite frankly, put the entire OAS system at risk. Actions speak louder than words and its flawed actions today and over the past few days show that it does not have the best interests of Canadians at heart.
The motion would indicate to hard-working Canadians that the opposition prefers to play tricks and games in the House. It prefers to ignore the facts that hundreds of experts are confirming. It prefers to ignore the changing landscape.
As I close, I want to acknowledge the Canadian seniors who built our great country. We are not considering change for the sake of change. We are considering change because it is in the best interests of Canadians.