Mr. Speaker, this winter we learned of the Conservative government's plan to raise the eligibility age for OAS from 65 to 67. This announcement goes against one of the Conservatives' own election promises, which was, “we will not cut transfer payments to individuals or to the provinces for essential things like health care, education, and pensions”.
Just for the record, that can be found on page 23 of the Conservative 2011 election platform.
The Prime Minister reiterated this promise on June 7, 2011, when he stood in this very House and said, “This government has been very clear. We will not cut pensions“.
Currently, there are nearly 5 million seniors collecting OAS and 1.7 million seniors collecting GIS, which means one in three Canadian seniors receive the GIS. What will this eligibility change mean to Canadian seniors? The lost income to Canadian seniors from this change will be significant. It will mean a loss of roughly $30,000 to the poorest seniors over these two years and roughly $13,000 over these two years for Canadians who receive only OAS.
That is a substantial loss. Unlike the CPP or private savings pillars, the OAS is a universal pension that does not depend on retirees' previous labour market participation or their participation in a registered pension plan or savings plan. In the words of the Canadian Centre for Policy Alternatives, the OAS and GIS are the “basic building blocks of the public universal system”, and goes on to say, “which make up the anti-poverty part of the system”.
The OAS pays a maximum benefit of $540 per month. On an annual basis, the maximum OAS payment is $6,481. The average monthly payment in the fall of 2011 was $508.35.
High income seniors must pay back all or some of their OAS benefits due to a formula set by the government. Above an income of $69,562, the OAS begins to be clawed back. Above an income of $112,772, the OAS benefit is completely clawed back.
Because many senior women were not part of the labour force earlier in their lives, to today's seniors, the OAS and GIS are particularly important retirement instruments. Senior women are less likely than senior men to draw an income from the CPP, private pension plans, RRSPs or employment earnings. This makes universal programs like the OAS and GIS particularly important for our female seniors.
The median income for senior women is about two-thirds that of the median income for senior men, We need to be clear that the OAS is really an anti-poverty and an equity tool used to ensure that seniors can retire with dignity and have funds to support their retirement.
It is loud and clear. The government's priority is to spend billions of dollars on corporate tax giveaways to their friends while slashing the services that Canadians rely upon. That is wrong.
Will the government listen to the expert advice it was given by the Parliamentary Budget Officer, the leader of the OECD pensions team and the head of the BMO Retirement Institute, among others.
The government should stop manufacturing a crisis to take away future benefits from Canadian seniors and keep old age security eligibility at age 65.