Madam Speaker, I find it unfortunate that the member for Charlottetown did not see fit to work co-operatively with the government to ensure the sustainability of the old age security program. Given the clear facts regarding the demographic realities our country is facing, I had hoped that the opposition would be interested in a more than short-sighted political rhetoric but, apparently, this is not the case.
It is particularly hypocritical, as it was the Liberals in the mid-nineties who first floated the idea of addressing the sustainability issues facing the old age security program. It was their then finance minister, Paul Martin, who attempted to bring forward necessary changes to the old age security program.
Unfortunately, the Liberals lacked the principle to do the right thing at that time. I am hopeful that they will see that the time is now to correct that inaction and join with us in making these common sense and reasonable changes.
I will be clear on the government's proposed changes to the old age security program. Current recipients of OAS and those aged 54 and older as of March 31 of this year will not be affected by these changes.
Starting in 2023, which is 11 years away, we will gradually raise the age of eligibility from 65 to 67. We are making these changes to the OAS because we want it to be there, not only for the baby boomers who are mentioned in the motion, but the generations to follow, people just like me.
Since we announced an increase in the age of eligibility, we have been very straightforward in telling Canadians why we are making this change. This government is taking action now to ensure that the OAS will be there for future generations before it is too late, and we are doing this without impacting current or near seniors and without putting an undue tax burden on younger generations.
We agree with this motion in recognizing the contributions of the baby boom generation and the positive impact that they have made in building Canada. The opposition, by using the term “baby boom generation”, implies that it knows something about demographics, which is why it continues to amaze me that the opposition does not accept the reality that demographics will challenge the sustainability of this program.
I will put this in perspective. In the 10 years from 1946 to 1956, the population of Canada increased by an unprecedented 20%. The baby boomers were economic drivers from the time of their birth. During the good times that followed, baby boomers themselves contributed to building a country that enjoys one of the healthiest economies in the world, as well as freedom and democracy. That is something for which we should be grateful proud.
Today, the boomers form our largest demographic group and the first of them started turning 65 in 2011. This has significant implications for our country. Canadians are living longer and healthier lives. In 1970, the average 65-year-old could expect to live to 81. Today, that has increased by four years. At the same time, Canada's birth rate is much lower than during the immediate post-war era. This shift has had an impact on our labour market.
In the 1970s there were seven working age Canadians for every person over the age of 65. In 20 years there will only be two working age Canadians for every senior. This means there will be fewer workers to take the place of baby boomers when they retire. Over the next 20 years, the number of Canadians over the age of 65 will jump from 4.7 million to 9.3 million. This will staggering increase in a relatively short period of time and it will come with a high price tag. The annual cost of the OAS program is expected to triple between 2010 and 2030, from $36 billion to $108.
At the same time as our seniors' population rises, the ratio of workers to retirees will be falling.
Unlike the Canada pension plan, the OAS is financed entirely from tax revenue that workers pay that year. Canada is changing rapidly and the old age security program must change with it to remain affordable. That is why we announced that the age of eligibility for OAS and the GIS will gradually increase from 65 to 67 starting in April 2023. These changes will be fully implemented by January 2029. The changes to the eligibility age for the OAS pension and the GIS will not affect anyone who was 54 or older as of March 31. For the allowance and the allowance of the survivor, anyone who was 49 years of age or older as of March 31 will be unaffected.
I will put this into perspective. People are living longer and, therefore, collecting OAS benefits longer. A 65-year-old today can expect to receive OAS benefits for 20 years compared with 16 years in 1970. By 2030, people who start receiving OAS benefits at 67 would also receive them for about 20 years.
Many OECD member countries have recently planned or announced increases to the age of eligibility for their public pension programs, including the United States.
The increase in the age of eligibility to the OAS will not affect current seniors. The 11 year advance notification and the subsequent 6 year phase-in period would give those who are affected ample time to make adjustments to their retirement plans. All Canadians can find a wealth of information on the Service Canada website regarding planning for retirement.
It is about ensuring a program that has served Canadians for generations will be there for generations to come.
We owe a lot to our seniors. They built our country and they deserve a secure and dignified retirement. Our government is determined to take responsible, fair and prudent action to ensure that the OAS program remains sustainable. It is the responsibility of the federal government to think of the future and to act in the long-term interests of all Canadians.
Sadly, the opposition has refused to acknowledge the realities of our aging population. The opposition parties have chosen the low road. Their baseless fear-mongering and wilful ignorance of the need for change does not serve the interest of Canadians. We will not follow the opposition approach of sticking our head in the sand and pretending we are oblivious to the coming challenges.
I ask all members of this House to consider our duty to our constituents and to this great nation, to rise above petty partisanship, to reflect on the actions that need to be taken and to ensure the fiscal sustainability of our cherished social programs. As such, I ask all members of this House to reject the opposition motion and support the actions our government is taking.