Old Age Security affordable without changes, watchdog says
Parliamentary Budget Officer says no need to raise OAS eligibility age to 67 from 65
Canada can afford its Old Age Security system without making younger Canadians wait an extra two years to receive benefits, Parliamentary Budget Officer Kevin Page insisted in a report Thursday.
Page first reported that on Jan. 12, 2011, but is repeating his assertion in a new report. Page wrote the report in response to questions from MPs on the House finance committee.
The Conservative government's move last December to limit the increase in health transfer payments to the provinces starting in 2016 — increasing the amount of money the federal government transfers every year but tying the increase to nominal GDP, which is projected to be lower than the current six per cent increases — means there's more room for spending or tax cuts, Page says.
"The updated analysis indicated that as a result of the change to the [Canada Health Transfer]... the federal fiscal structure was sustainable and had sufficient room to absorb the cost pressures arising from the Old Age Security (OAS) program," Page's report says.
Prime Minister Stephen Harper, Finance Minister Jim Flaherty and Human Resources Minister Diane Finley have all argued that the eligibility age for OAS has to be increased to 67 years old from 65. That change is set to happen gradually, starting in 2023.
Page, however, says the government will be able to afford OAS for everyone starting at age 65.
"While there may be other policy rationales for changing the OAS program, PBO’s analysis indicates that the program itself is financially sustainable over the long term within the government’s current fiscal structure, given projected demographic and economic trends."
Page hasn't yet updated his analysis to include the budget cuts announced in the 2012 federal budget, he said.
"Incorporating this forecast would further improve the government’s fiscal room to reduce revenue [cut taxes], increase program spending or some combination of both while maintaining fiscal sustainability."
The provinces and territories will have to make up the funding themselves, he said, noting, "the provincial-territorial long-term fiscal situation has deteriorated."
Old Age Security affordable without changes, watchdog says - Politics - CBC News
Parliamentary Budget Officer says no need to raise OAS eligibility age to 67 from 65
Canada can afford its Old Age Security system without making younger Canadians wait an extra two years to receive benefits, Parliamentary Budget Officer Kevin Page insisted in a report Thursday.
Page first reported that on Jan. 12, 2011, but is repeating his assertion in a new report. Page wrote the report in response to questions from MPs on the House finance committee.
The Conservative government's move last December to limit the increase in health transfer payments to the provinces starting in 2016 — increasing the amount of money the federal government transfers every year but tying the increase to nominal GDP, which is projected to be lower than the current six per cent increases — means there's more room for spending or tax cuts, Page says.
"The updated analysis indicated that as a result of the change to the [Canada Health Transfer]... the federal fiscal structure was sustainable and had sufficient room to absorb the cost pressures arising from the Old Age Security (OAS) program," Page's report says.
Prime Minister Stephen Harper, Finance Minister Jim Flaherty and Human Resources Minister Diane Finley have all argued that the eligibility age for OAS has to be increased to 67 years old from 65. That change is set to happen gradually, starting in 2023.
Page, however, says the government will be able to afford OAS for everyone starting at age 65.
"While there may be other policy rationales for changing the OAS program, PBO’s analysis indicates that the program itself is financially sustainable over the long term within the government’s current fiscal structure, given projected demographic and economic trends."
Page hasn't yet updated his analysis to include the budget cuts announced in the 2012 federal budget, he said.
"Incorporating this forecast would further improve the government’s fiscal room to reduce revenue [cut taxes], increase program spending or some combination of both while maintaining fiscal sustainability."
The provinces and territories will have to make up the funding themselves, he said, noting, "the provincial-territorial long-term fiscal situation has deteriorated."
Old Age Security affordable without changes, watchdog says - Politics - CBC News
