Mr. Speaker, I am pleased to rise today to respond to the motion from the member for London—Fanshawe on our government's plan to raise the eligibility for the old age security program from 65 to 67 years of age.
We cannot hand over our problems to the next generation and expect it to solve them. That is the irresponsible course of action that the opposition is arguing in favour of with this motion today. Sadly, this would not be out of place if it were a Liberal motion. In the mid-1990s, then finance minister Paul Martin attempted to bring forward his plan to ensure the sustainability of the old age security program. Unfortunately, the Liberals lacked the principle to do the right thing at that time. I am hopeful they will see the time is now to correct that inaction and to join with us in making these common sense and reasonable changes.
In 2010, annual OAS costs were $36 billion. If nothing is done, in less than 20 years the program costs will triple to $108 billion. In other words, from 13¢ of every federal tax dollar to 21¢ will be the jump in cost. However, this is not an issue of how much money will be saved but, rather, whether we will make the choices now to ensure the very sustainability of the OAS program over the long term. This is what these changes are about: making sure the system will be there for future generations when they need it.
The aging of our population is forcing us to confront a new reality. In 1970, the average man lived to be 69 and the average woman lived to be 76. Today, life expectancy is 79 for men and 83 for women. That is good news, but it also means that without changes Canadians will be collecting retirement and social benefits for a much longer time than they did when the OAS was first introduced, at a time when seniors will comprise a larger proportion of Canadian society. The Chief Actuary forecasts that the number of OAS recipients will double from 2010 to 2030, from 4.8 million to 9.3 million. In the same time period, the ratio of working-age Canadians relative to the number of seniors is expected to fall. Right now, there are four working-age Canadians for every senior. By 2030, that number will shrink to two working-age Canadians to every senior. This is a critical ratio, as OAS benefits are paid out of the taxes collected in a given year.
Currently there are four working-age Canadians to support every senior and, as I said, in 20 years there will only be two, so not only are program costs rising, but there will be fewer taxpayers available to pay for the social programs seniors will be relying on.
These numbers are not new. The reality of an aging population has been known for quite some time. The result will be less financial room for other government priorities, such as the Canada health transfer, the Canada social transfer, public safety and children's benefits. Can the member for London—Fanshawe please tell us which of these programs she would cut?
The Edmonton Journal's editorial board has this to say:
...we should thank...[the Prime Minister] for having the courage to start the conversation. It would have been far easier to pass the buck to his successor a few more years down the road.
Unfortunately, that is exactly what the previous Liberal government did. It simply passed the buck. We can see the result of that. In five out of six elections since the Liberals formed government, Canadian voters returned fewer and fewer Liberals to this place than were here before. This is also why Canadians decided to elect a strong, stable national majority Conservative government.
They understood that under the leadership of our Prime Minister, Canadians would be guaranteed a principled government that would act to ensure the long-term prosperity of our great country.
Let us clear about one thing. Our proposed changes do not affect current OAS or GIS recipients. These individuals will not lose one cent. We will gradually raise the age of eligibility for OAS from 65 to 67 starting on April 1, 2023. That is 11 years from now, and the change will be phased in gradually over a period of 6 years. We believe this will prevent any undue hardship to Canadians. People who are close to retirement, that is people age 54 and over as of March 31 of this year, will not be affected in any way by this policy change.
I would also like to highlight two other changes to the OAS program that were announced in budget 2012: proactive enrolment and voluntary deferral.
Starting in 2013, we will begin the proactive enrolment of many seniors for their OAS benefits. This will largely eliminate the need for eligible seniors to apply for OAS benefits. It will also ensure that more seniors receive the benefits to which they are entitled. This measure will reduce the application burden on many seniors and reduce the government's administrative costs.
On July 1, 2013, our government will provide Canadians the choice to voluntarily defer their OAS pension. This will permit individuals to delay receiving their OAS pension by up to five years in exchange for an enhanced monthly pension for the rest of their live. This will provide increased choice to Canadians as to when they wish to retire and will allow Canadians who do continue working to increase the size of their monthly benefit after they stop working. To be clear, the amount received by those who delay their OAS will be the same over the life of an individual as those who begin receiving their benefits as soon as they are eligible.
We will also ensure that certain federal income support programs that currently end at age 65, including programs that are provided for our veterans and low-income first nation individuals on reserve, are aligned with changes to the OAS program. This will ensure that individuals receiving benefits from these programs do not face a gap in income at ages 65 and 66. We will also compensate the provinces for the net cost to their social programs caused by the increase in the age of eligibility.
To be clear, these proposed changes will not affect the Canada pension plan, as the CPP and the OAS are two separate programs, and there is no reduction to seniors' benefits. The Chief Actuary has confirmed that the CPP is financially sound and fully sustainable for the long term. The changes proposed to the OAS program will secure the retirement benefits of future generations making the program sustainable for the long term.
The numbers tell us that we have to confront our fiscal and demographic realities to serve the best interests of all Canadians both now and in the future. If we do not reform the OAS, there are only two other solutions: either to raise taxes or to divert funds from other programs and services.
I do not think it will come as a surprise to members in this House that our government remains committed to our low-tax plan for jobs and economic growth. That is why we are proposing these modest changes to ensure the OAS is put on a sustainable path so it is there when Canadians need it most.
Canada's prospects are bright. Among the G7 countries, Canada has posted the strongest growth in employment, with 693,000 jobs created since the depth of the recession.
Thanks to the strong leadership of our Prime Minister and our Conservative government, Canada is in the enviable position of having the financial flexibility to phase in these changes over a lengthy period of time.
Sadly, we are witnessing more narrow-minded political games from the opposition. Its reckless approach would jeopardize the very sustainability of the OAS program and demonstrates a wilful ignorance of the reality of our aging population.
I urge the member and her party to listen to what she has said in the past and support our government by voting against this motion.