Madam Speaker, I am pleased to rise tonight to speak to the motion.
Let me make our position clear. We could have been in favour of Motion No. 307, as we agree with many of the points in the motion. However, we cannot agree with the text that calls for the age of eligibility for OAS to remain at 65, as such a move would threaten the sustainability of the program.
Our government attempted to reach a compromise with the member opposite to amend the motion, but the member expressed no interest in negotiating with us on this matter.
Unfortunately, the opposition continues to play political games with this most serious of matters. Our government will not be so irresponsible. We have introduced changes to the OAS program that would gradually increase the age of OAS eligibility from 65 to 67 years of age, starting in 2023.
We have witnessed the spectacle of the opposition members trying to scare current OAS recipients into believing their benefits will be affected. I can assure all current OAS recipients and all Canadians over the age of 54 that as of March 31 of this year their benefits would not be affected and they would see no change to their OAS eligibility.
The opposition seems to still, after many hours of debate on this topic, not understand the facts of the situation or choose not to understand the facts.
The OAS program is the single largest problem the Government of Canada has. It was established in 1952, at a time that was quite different from the one we now face. All of this needs to be reviewed, viewed and looked at in this context.
In the 1970s there were seven working age Canadians for every senior. Currently, there are four working age Canadians per retired senior. In 20 years there will only be two working age Canadians for every senior. It would seem obvious that some action and something needs to be done.
How does the member opposite believe his program is sustainable on its current path? Is it fair to Canadian workers 20 years from now, who would see serious job-killing increases in taxes, to pay for the short-sightedness of previous generations, or would that future worker see other government services cut to the bone to pay for an ever-increasing expense of OAS? What kind of legacy do we want to leave to those who come after us?
In 1970 the average 65-year-old could expect to live to 81. Today, that has increased by four years. With people living longer, they are collecting OAS benefits for an increasing number of years. Put them all together, and the cost of the OAS program, if left unchanged, would go from approximately $38 billion in 2011 to $108 billion in 2030.
Therefore, something had to be done to ensure that the OAS would be sustainable in the face of demographic realities. A responsible government does not shirk from its duty in the face of such a challenge. Even if it is difficult or uncomfortable, the responsibility is there to act.
A responsible government acts in the best interests of Canadians, including those who will come after us. That is why we have announced specific steps in our last budget.
The age of eligibility for old age security pension and the guaranteed income supplement would be gradually raised from age 65 to 67, starting in April 2023, with full implementation by January 2029.
Given that life expectancy has been increasing, even with the increase in the OAS eligibility age to 67, people who turn 65 in 2030 can expect to receive OAS benefits for about the same number of years over their lifetime as seniors who turn 65 today.
The economic action plan will ensure that the OAS program will be on a sustainable path to ensure that it will be there for future generations.
Our government will also ensure that certain federal programs, including those provided by Veterans Affairs Canada and Aboriginal Affairs and Northern Development Canada, currently providing income support benefits until age 65 will be aligned with changes in the OAS program.
Our government will discuss the impact of the changes to the OAS program on CPP disability and survivor benefits with provinces and territories, which are joint stewards of the CPP, during the next tri-annual review of the CPP. We will also compensate the provinces for the net additional costs they may face resulting from increasing the age of eligibility for OAS benefits.
Starting on July 1, 2013, we will give people the flexibility to voluntarily defer receiving their OAS pension for up to five years in exchange for a higher actuarially adjusted pension. This will give Canadians a choice of taking up their OAS pension at a later time if they decide it is better for their individual retirement plans.
We have taken steps to make these changes gradually to OAS. The increase in the age of eligibility of OAS and GIS benefits will not affect anyone who is 54 years of age or older as of March 31, 2012. The increase in the age of eligibility of allowance for survivor benefits will not affect anyone who is 49 years of age or older as of March 31, 2012. The 11-year notification and the subsequent 6 year phase-in period will allow those affected by these changes ample time to make adjustments to their retirement plans.
As members can see, we are allowing Canadians the time needed to plan for their retirement.
Many other countries have recently increased or announced plans to increase the eligibility ages of their public pension plans. These include Australia, the United Kingdom, the United States, France, Germany, the Netherlands, Japan and Korea.
As David Dodge, the former governor of the Bank of Canada and deputy minister of finance, said recently in an interview, “we're at least 15 years late in getting started in raising the age of entitlement for...OAS. We can't wait any longer to make these changes. Inaction is not an option in this situation”.
He makes a good point that is shared by many.
The cost of the OAS program is poised to soar as the baby boomer generation retires. In fact, the first of the baby boomers started to turn 65 in 2011.
In summary, it is the responsibility of the federal government to think of the future and to act in the long-term interests of Canadians. Sadly, the opposition has refused to acknowledge the realities of our aging population in order to play political games. Private sector economists, financial institutions and former Bank of Canada governors have confirmed that we must act now to make the OAS program sustainable.
Our goal is to strengthen the financial security of Canadian workers and families over the next few years and over the next generation. The OAS program was a great step forward in 1952. We now need to take another step forward and bring it into the 21st century. We want to position Canada as one of the world's advanced economies, a country that looks after its own and builds towards its future.
That is why I am asking the member for Charlottetown to co-operate with us, and all members of the House, to ensure the sustainability of the old age security program.
I hope the opposition members, particularly the member for Charlottetown, have been persuaded by these arguments. I would therefore give them another opportunity to do the right thing and work with our government in the interest of future generations.
I move the following: That this motion be amended by substituting the words in sub-point (c) with the words, “commit to maintaining the sustainability of the OAS program”, instead of the original wording of, “commit to maintaining the sixty-five year qualifying age contained in section 3 of the Old Age Security Act”.