It has been nearly 30 years since an Ottawa government has threatened to tamper with Old Age Security (OAS or, more commonly, “The Pension”).
Prime Minister Brian Mulroney was leading a Progressive Conservative government and the grassroots response to the lead politician was swift and unequivocal.
Even on Manitoulin Island, where citizens are more inclined to discuss, even complain, about government actions but only in coffee shops or at home, large groups of seniors demanded—and received—meetings with then-MP Dr. Maurice Foster and clearly stated their position on the topic: leave the pension alone, index and all.
Prime Minister Mulroney’s tinkering with The Pension would have had a bearing on current recipients at that time.
Prime Minister Harper’s apologists, by proposing that the qualifying age for The Pension could rise to 67 from the current 65, are attempting to mitigate and minimize criticism and pushback by stressing that this would not apply to anyone (presumably 65 or 66) currently receiving the benefit, nor would it apply to Canadians currently “close” to 65 and fully expecting to receive The Pension soon as a part of their retirement income.
Many of us will remember that the original qualifying age for The Pension was 70. Old Age Security benefits were first introduced by the then-Prime Minister Louis St. Laurent Liberal government in 1952 and the initial recipients would be the grandparents of the baby-boomer generation.
Canada’s population was a great deal smaller then, our country was far more rural then it is now, we were largely resisting large-scale immigration and so people simply worked until they were 70 or even older because of the requirements of the economy.
In fact, in Canada, the introduction of The Pension was telling Canadians, for the very first time, that retirement was not only a possibility but was something that citizens had earned and this monthly cheque from Ottawa was a reward for a lifetime of work.
And that particular birthday—one’s seventieth—acquired an entirely new meaning: it meant it was time to retire. It also was meant to create workplace opportunities for Canada’s volunteer military personnel who had finished “doing their bits” during the Second World War and needed peacetime jobs.
Later on, in 1965, when the baby boomers were beginning to enter the workforce in large numbers and Canada’s doors were well and truly open to immigrants from all over the world who brought with them a variety of skills, the Liberal government, under then-Prime Minister Mike Pearson, lowered the federal pensionable age to 65 and so it remains.
Until now, and this is important, the age of retirement, the age when one can apply for and receive The Pension has been clearly governed by the ability of the emerging workforce to step into the jobs left by those who retire from work. In fact, it wasn’t that many years ago that Ottawa flirted briefly with the idea of further lowering the qualifying age for The Pension. The rationale then was, once again, to create opportunities for those seeking to enter the workforce to be able to do just that as those retiring at, say 59 or 60, would be replaced by slightly younger people moving up and into newly vacated jobs and so on down the line until there were entry-level positions created for young people.
What has been proposed, increasing the qualifying age to receive The Pension, will simply mean that a great many people will see this as a new target to begin retirement and so will work that many more years.
That will also mean, should this change be made, that for the first time since The Pension’s inception, its qualifying age will not have been linked to the practicalities of the workforce which means, in turn, that many young would-be workers will have to wait that much longer to enter the world of work in any significant way.
Quite apart from the expectations people will have about Old Age Security after age 65 and the dislocation of many lives as their plans are changed without their input, this proposed changing of The Pension will for the first time not be based on both a reward for a lifetime’s work and to create opportunities for new workers.
This time, it’s about balancing the budget and paying down the nation’s debt.
Not that these are not worthy considerations. They are.
But this isn’t the way to effect savings. Not at this time when unemployment is still two points greater than ideal and certainly not until either the Canadian Pension Plan is upgraded so as to pay out more at retirement or the additional pension benefits that have also been recently proposed are put in place and begin paying out.