Bloc Québécois leader Yves-François Blanchet speaks to media in the House of Commons foyer on Parliament Hill in Ottawa on Sept. 19.Blair Gable/Reuters
Some economists are questioning the Bloc Québécois demand to enhance seniors benefits in exchange for keeping the minority Liberal government in power this fall, saying the estimated price tag of $16-billion over five years does not clearly target financial need and will worsen generational fairness.
Speaking with reporters last week, Bloc Leader Yves-François Blanchet repeated his call for Ottawa to boost the benefits, saying he’s heard rumours that the government is taking the request seriously.
His party wants the government to support one of its private members bills, C-319, which amends the Old Age Security Act to provide a 10-per-cent boost in benefits for seniors aged 65 to 74. The Liberal government recently implemented such an increase in July, 2022, but limited it to seniors aged 75 and up.
However, the bill’s cost has several economists – including some who the Liberal government regularly turns to for advice – saying Parliament should carefully consider the trade offs involved, especially ahead of an election where the federal parties are making clear pitches to young voters frustrated with the cost of living.
“That’s a very heavy expenditure for a questionable policy outcome,” said Kevin Milligan, the director of the Vancouver School of Economics at the University of British Columbia who provided closed-door advice to the Liberal cabinet during an August retreat in Halifax, in an interview.
He added that “if their stated priority is helping out the young generation, then spending it on the elderly is going to be inconsistent with helping out the young generation.”
In pushing for the bill, Mr. Blanchet has referenced his party’s enhanced bargaining power in the minority Parliament, now that the NDP has said its support for the government on confidence votes is no longer guaranteed.
“We have [proposed] a law which is now at the very centre of the survival of this government. This is what we call power,” Mr. Blanchet told reporters on Thursday.
Old Age Security, or OAS, pays up to $718.33 a month for seniors aged 65 to 74 and is phased out for individuals with income above $142,609. There is also a related benefit for low-income seniors called the Guaranteed Income Supplement, or GIS.
The government’s 2021 budget said the increase for seniors 75 and up, which covered both OAS and GIS, works out to more than $766 in new annual support for full pensioners. It also said the cost of that benefit will be $12-billion over five years and $3-billion a year thereafter.
However, a cost analysis of the Bloc’s bill by Parliamentary Budget Officer Yves Giroux said adding ages 65 to 74 to that benefit would cost $16-billion over five years, or more than $3.5-billion a year once fully implemented. The PBO report was released in May 2023, but Mr. Giroux said in an e-mail that it remains a reasonable cost estimate.
The Bloc bill was introduced in 2021 and approved at second reading last year with the support of Conservative and NDP MPs, over the objection of Liberal MPs.
The bill can only proceed if the government endorses it through a royal recommendation because it involves spending tax dollars. Alternatively, Finance Minister Chrystia Freeland could choose to increase seniors benefits in her fall economic update, a new government bill or the 2025 budget, but her office declined to comment on the matter.
With a federal election campaign set for October, 2025, at the latest, political parties are eager to show their policies are in line with calls for generational fairness.
Ms. Freeland specifically singled out millennials and the younger Gen Z, in announcing mortgage rule changes last week.
But University of Calgary economics professor Trevor Tombe said boosting benefits to seniors, including many with relatively high incomes who are not in financial duress, means less money for housing and other priorities of younger Canadians.
He said in an interview that seniors benefits are now among the largest categories of Ottawa’s spending, pointing to federal data showing plans to spend $81.1-billion on them this current fiscal year.
“It’s also the fastest growing area of federal spending,” said Prof. Tombe, attributing it to the retirement of the large baby-boom generation. He said the existing benefits programs are largely why poverty levels among seniors are so low.
“Increasing the generosity of elderly benefits in Canada is potentially misallocating public funds,” he said, adding that “there’s certainly areas of pain among younger Canadians, and measures like boosting OAS just makes it harder to address those.”
Jennifer Robson, a Carleton University associate professor of political management who has previously provided policy advice to the Finance Department, said the annual cost of the Bloc’s proposal is likely to increase over time.
She points to actuarial demographic forecasts showing the number of OAS recipients is projected to increase to 9.8 million by 2035 and to 12.6 million by 2060, up from 7.2 million in 2023.
Prof. Robson said in an e-mail that the rationale for starting the increased benefit at 75 was to help seniors who may be at risk of outliving their personal savings.
“It’s not clear to me what policy problem this bill is intended to solve by boosting the OAS for younger seniors,” she said. She added that “a boost to the targeted GIS might make more sense.”
The Bloc bill was studied and approved by the Commons human resources committee without amendment in February of this year.
During those hearings, several seniors advocates praised the bill.
Isobel Mackenzie, who at the time was the seniors advocate for the Province of British Columbia, told MPs in February that seniors who rent and rely almost entirely on OAS and GIS for their income are struggling the most with affordability.
“The stories we hear of seniors living with very limited incomes are, of course, very distressing,” she said.
NDP seniors critic Rachel Blaney said in a statement that her party supports the bill, adding that seniors should not be scapegoated “for the Liberals’ failures on economic fairness for young people.”
Conservative finance critic Jasraj Singh Hallan said in a statement that his party will evaluate the bill if it comes before the House again, but did not clearly say whether the party continues to support it.