Won't somebody please think of the seniors?

The Bloc's bill is too expensive and poorly targeted, but we can and should help low and moderate income seniors.

Generational fairness was the theme of this year’s budget, with significant new housing dollars. And it’s an idea that’s now being tested by Parliament.

That’s because the Bloc is threatening an election if the government doesn’t pony up $16 billion over 5 years in new spending for Old Age Security.

It’s a bad idea as a question of policy, and I also think it’s bad politics in the long-run despite recent polls.

And yes, I know, seniors vote. The Liberals know that too, having reversed Harper’s retirement age changes, and increased elderly benefits both for low-income seniors, as well as more broadly for most seniors 75 and older through OAS.

Now, I didn’t think increasing OAS was a good idea then. I lost that debate in my party. The Bloc’s demand to now increase it for seniors 65 to 74, oddly supported by the Conservatives and the NDP, is even worse.

Simply, OAS increases are both too expensive and poorly targeted.

First, consider who benefits.

The median income for seniors is less than $35,000. But if you’re 65 and earn up to around $90,000, you get the full annual OAS benefit of over $8,500.

Once you hit that $90k income threshold, the benefit starts to get clawed back, 15 cents on each dollar earned. But a senior earning $120k still receives almost 4 grand, and it isn’t entirely phased out until one earns about $150,000.

It gets even stranger when you consider that the claw-back is based on individual income, not family income. So a seniors’ couple could together earn $180,000, and receive more than $17,000 in benefits. Earn 240 grand together, and you’re still getting almost 8 grand from the federal government. 

Add all that to the fact that those aged 65+ also have the highest percentage of net wealth - the housing lottery winners of our society - and calling it a poorly targeted program is putting it politely.

Remember, this isn’t retirement income that one has paid into. This is a benefit fully funded from our general tax dollars. Your tax dollars.

At a huge cost already.

Without any further increase to elderly benefits, they are already the single biggest budget line item, responsible for roughly one in every seven dollars of federal spending. 

They are also projected to grow the fastest. 

Consider that this year the government budgeted $34.6 billion collectively for both the Canada Child Benefit and child care, projected to grow to $40.2 billion in 4 years. 

In contrast, the government budgeted $81 billion for elderly benefits this year. In only 4 years, that spending is projected to increase to $100 billion, and the number of beneficiaries (and spending) is expected to keep growing rapidly through 2035. 

Of these huge numbers, 75% goes to the poorly targeted OAS.

Do we really think now’s the time to add at least another $3 billion per year?

It is a direct challenge to generational fairness if new spending prioritizes poorly targeted old age security when young people are struggling with the very idea of ever owning a home or finding anything resembling affordable shelter.

Of course, low and moderate income seniors are struggling with rent too.

Yes, seniors have the lowest poverty rate among any demographic - in 2022, the poverty rate was 6% for seniors vs 9.9% for the general population, 17.5% for Indigenous people, 12.3% for people with disabilities, 9.9% for kids, you get the idea.

But it’s also true that no senior should live in poverty. And when you dive deeper into the numbers, you’ll find that the poverty rate is significantly higher for single seniors, rising to 13.8%. 

So let’s help them.

We could focus on the Guaranteed Income Supplement, squarely serving low-income seniors. 

Or we could adjust the OAS program to claw back funds more quickly from upper income couples, and direct those funds to low and moderate income seniors - especially single seniors - who are in the greatest need.

We could massively reduce poverty and financial stress among seniors without spending a single new dollar, so long as we’re willing to deal with fairness within an older generation and not impose further unfairness on a younger one.

For a leader who wants to be seen as fiscally responsible and fighting for young people, Poilievre showed us he was the exact opposite of both when he backed the Bloc’s proposal.

For a leader who wants to be seen as a champion for the vulnerable, Singh showed us he doesn’t understand how existing basic income support programs actually work.

If this week is any indication, it sure looks like there’s only one party that has any concern at all for generational fairness.