People sit along Mont-Royal Street in Montreal on June 23.Andrej Ivanov/The Globe and Mail
The Bloc Québécois’ bid to add billions to Old Age Security for rich and poor seniors alike is out of touch with the priorities of most Canadians and retirees, including those in Quebec.
Rather than spend more taxpayer dollars, a majority of Canadians want Ottawa to redesign OAS so that it reduces spending on affluent retirees and repurposes the savings to eliminate poverty among seniors, help younger generations and reduce the deficit, according to a new study.
The study, conducted by Research Co. for my team at Generation Squeeze, began by providing participants some basic facts about the current OAS program. Full benefits of about $8,700 a year are paid to retirees with individual annual incomes of as much as $90,000. The benefit is slowly clawed back above that threshold, but individuals with incomes of more than $140,000 still get some support. This means some retired couples are still receiving publicly funded OAS benefits even with combined incomes of more than a quarter of a million dollars.
By contrast, the median income for individual Canadians is $43,000 a year.
After sharing this information, 73 per cent of Quebeckers, 71 per cent of all Canadians and 69 per cent of seniors indicated they would support ending OAS benefits for retirees with annual incomes above $100,000 – provided the savings were used to deliver higher cash benefits for poor seniors.
Support for repurposing these savings was also strong for advancing other goals. Whether you look at all Canadians, Quebeckers or just retirees, all show similar levels of support for using any savings to deliver more funding for housing, child care and postsecondary education. A majority also favoured repurposing OAS payments received by affluent retirees to reduce the deficit, but support drops to around 57 per cent.
The poll didn’t just invite respondents to consider generalities. It offered specific proposals so that people could carefully consider the tradeoffs. The option most favoured by Canadians was to ask “the 1 in 4 retirees in households with incomes of $100,000 or higher to accept smaller OAS payments that would reduce their after-tax income by approximately $3,200.”
Within Quebec, 70 per cent of respondents supported the idea, along with 74 per cent of all Canadians and 76 per cent of people 65 and older. And there was no partisan divide: More than 70 per cent of Conservative, Liberal and NDP voters backed the idea.
The study polled 1,002 Canadian adults between Oct. 19 and 21 and has a margin of error of plus or minus 3.1 percentage points, 19 times out of 20. All the questions and responses are available for public review.
Refining the OAS clawback for households with incomes of more than $100,000 would be transformative. It would free up $36-billion in federal spending over the next five years.
About $12-billion could be added to the Guaranteed Income Supplement to deliver an extra $5,000 a year to the 469,000 seniors who currently fall below Canada’s official poverty measure. This would virtually eliminate poverty among seniors – something the Bloc proposal has no hope of achieving. For those who remain near the poverty line, another $4-billion could be added to the GIS to enhance their incomes too.
The remaining $20-billion could be reinvested to double the increases for housing and postsecondary education in the 2024 federal budget, add 50 per cent to child care and cut the deficit by billions.
The poll asked Canadians to consider other options. The biggest savings – $64-billion over the next five years – would come from reorganizing OAS to distribute cash to retirees the way the Canada Child Benefit delivers cash to families with kids. The CCB starts clawing back benefits at around $79,000 of household income.
More than two-thirds of Quebeckers supported this idea, with similar acceptance across the rest of the country, including 64 per cent of seniors.
Given these poll results, the Bloc is blowing political leverage in this minority Parliament on a proposal most Quebeckers think is wasteful. The other opposition parties were short-sighted by piling on in support of the Bloc motion.
Voters are ready to support a cost-effective plan to eliminate poverty among seniors, help younger generations and save taxpayer dollars. (If you’d like to show your support, you can tell your MP through the Generation Squeeze website).
Adapting OAS to achieve this win-win-win would provide a strong foundation for any party platform heading into the coming federal election.
Dr. Paul Kershaw is a policy professor at UBC and the founder of Generation Squeeze, Canada’s leading voice for generational fairness. You can follow Gen Squeeze on Twitter, Facebook, Instagram, and subscribe to Paul’s Hard Truths podcast.
