Old Age Security Pension | Would the increase come at the expense of future generations?

It is demanded by seniors’ groups in Quebec, but criticized elsewhere in the country in the name of intergenerational equity. The increase in the Old Age Security pension from age 65 demanded by the Bloc Québécois has the support of all the opposition parties, but not that of the Trudeau government which had put millennials and generation Z at the heart of its latest budget. Decryption.

What is the Bloc Québécois asking for?

Yves-François Blanchet rejected during the 2021 electoral campaign “any attempt to create two classes of seniors”. The Liberal government then distributed $500 checks to those aged 75 and over and announced in its pre-election budget its intention to increase the Old Age Security (PSV) pension by 10%, but only for this age group. Those aged 65 to 74 were therefore deprived of around $800 more annually when the measure came into force in July 2022.

The following year, Bloc MP Andréanne Larouche denounced “a form of ageism” and introduced Bill C-319 so that all seniors would be entitled to the 10% increase. The PSV provides a maximum amount of approximately $8,700 per year for people aged 65 to 74 and a little over $9,600 for those aged 75 and over provided that they have a net income of less than approximately 150,000 $. Those with income above $90,997 must repay part or all of it.

The bill also provides for an increase in the exemption from $5,000 to $6,500 for a person’s employment income in calculating the amount of the Guaranteed Income Supplement (GIS).

This allowance, intended for seniors whose annual income is less than $22,000, can reach up to $13,000.

“As these are small amounts, the indexations cause you to become poorer from year to year,” argued Pierre-Claude Poulin of the finance committee of the Quebec Association for the Defense of the Rights of Retired and Pre-retired Persons (AQDR) , during his appearance in Parliament last week. “This year, in Quebec alone, the average increase in rents is 6%, while the pension of retirees is 2.3%,” he explained.

The AQDR is one of eight groups of seniors who traveled to Ottawa to put pressure on elected officials. The Bloc Québécois bill also has the support of the Canadian Association of Retired Persons (CARP), which represents seniors elsewhere in the country. “There are a significant number of seniors who live in poverty,” indicates its president Rudy Buttignol.

A strong majority of Canadians agree with the increase in the PSV, according to a survey carried out by the Nanos firm on behalf of the CTV television network last week^⁠1. Four million seniors would benefit from it across the country, including one million in Quebec, according to the Bloc Québécois.

What’s the problem?

The pressure group Generation Squeeze believes that the Bloc Québécois bill is “terribly unfair” for future generations. “Millennials and Generation Z face another risk to their finances as the Bloc Québécois gains influence,” argues its founder, Paul Kershaw, professor of public policy at the University of Columbia. British. “We must not forget that Old Age Security already constitutes the largest and fastest growing portion of the federal budget,” he adds.

The government predicted that benefits for the elderly would reach 80.6 billion in 2024-2025 and would approach 100 billion in 2028-2029. He points out that these are tens of thousands of dollars more than the amounts provided for the Canada Child Benefit, $10 daycare, housing and post-secondary education.

The implementation of Bill C-319 would add to this substantial amount a little more than $3 billion per year for a total of $16 billion over five years. A large part of the taxes paid by young taxpayers would therefore be used to pay for the increase in the PSV, while they already face numerous difficulties such as a prohibitive real estate market, underlines Generation Squeeze.

Especially since retirees with a family income of $180,000 per year could benefit from it.

The Trudeau government, which has been running deficits since 2015, is sensitive to this argument. Intergenerational equity was the central theme of his last budget which contained a series of measures aimed at millennials and generation Z, particularly in terms of housing. “We must act in the interest of all Canadians. Yes, the elderly, but also their children and their grandchildren,” noted Finance Minister Chrystia Freeland at a press conference last week.

Minister Jean-Yves Duclos, Justin Trudeau’s political lieutenant in Quebec, spoke on Monday of the government’s desire to “continue to increase support for vulnerable seniors.” “We think that what the Bloc Québécois is proposing is not the right way to proceed,” he recalled.

The Green Party also listened attentively to the reasoning of Generation Squeeze, but ended up supporting the Bloc Québécois proposal because it proposes to cut subsidies to oil and gas companies, estimated between 50 and 80 billion over five years .

The Bloc Québécois has given until October 29 for the adoption of its bill, otherwise it will take steps to bring down the government.

1. View the results of the Nanos survey