Should the old-age pension be increased?

Relegated to the role of second fiddle since the last election, the Bloc Québécois is making itself heard loud and clear now that the New Democrats have torn up the agreement that ensured power for the Trudeau government.

The Bloc intends to sell its support very dearly, which would allow the Liberals to extend their reign by a few weeks or a few months.

His hobbyhorse: an increase in the Old Age Security (OAS) pension for people aged 65 to 75, modelled on the 10% increase that the Liberals granted to seniors aged 75 and over in 2022.

But is this really the biggest priority for Quebecers?

It’s not clear.

It is true that the rise in inflation has eaten into seniors’ budgets, which is distressing when you are no longer in the job market. But it must be said that their government pensions (QPP, OAS) have been fully indexed, which protects them against the loss of purchasing power.

That may not be the case with their employer’s pension. But seniors who have assets have enjoyed boom years. The stock market is at a peak. Guaranteed investments are yielding more, thanks to rising interest rates. And real estate prices have soared. In Quebec, a single-family home is now worth $443,000, an increase of $133,000 or 43% in four years.

Not too bad, right?

Obviously, some seniors are struggling. This is not to deny. But when you look at Statistics Canada data, you realize that they are doing better than others, overall.

Income for those aged 65 and over fell by 1.8% between 2021 and 2022, if inflation is taken into account. This is the least pronounced decline of all age groups, with young people being the most affected with a decline of 5.2% for those aged 25-34 and 15% for those under 25.

In addition, the poverty rate is lower among people aged 65 and over than among the rest of the population. This is the only age category where the proportion of low-income families has decreased, from 16.2% in 2021 to 14.8% in 2022. Meanwhile, the proportion of low-income families has increased markedly among young people aged 25-34, from 20.2% in 2021 to 23.5% in 2022.

In light of these figures, we must therefore ask ourselves whether it is appropriate for the Trudeau government to take out its chequebook to increase the OAS by 10%, which would bring an additional $860 to seniors aged 65 to 74 who currently receive up to $8,616 per year.

This enhancement would be very expensive: $3 billion per year, according to calculations by the Parliamentary Budget Officer. And let’s face it, this is a recurring bill that would be added to the cost of the PSV program, which is already rising due to the aging of the population.

Over five years, the 10% increase would cost $16 billion. That’s much more than the measures obtained by the NDP.

For example, the initial phase of the pharmacare program, which focuses on contraceptives and diabetes treatment, will increase federal spending by $1.9 billion over five years. And the implementation of the Canadian dental care plan, which will provide coverage to uninsured Canadians with incomes below $90,000, will cost $10 billion over five years.

For nine years, the Liberals have been running deficits. But we cannot accuse them of being too spendthrift while demanding that they spend even more.

From one budget to the next, the Trudeau government has not hesitated to improve social programs, trampling on provincial areas of jurisdiction, without increasing taxes to ensure their financing.

Last winter, he finally increased the capital gains tax, or the profit made when selling an asset. But the fall of the Trudeau government would cancel this increase, our colleagues on Parliament Hill informed us on Tuesday.

Oops! The Federal Treasury would lose 19 billion over five years. A huge hole in our public finances.

And if a potential Conservative government pulls the plug on financing new social programs, the provinces will be left holding the bill, which will increase the fiscal imbalance.

At this point, Quebec would therefore have more to gain from an increase in health transfers that the Trudeau government is reluctant to grant it. All Quebecers would benefit, starting with seniors.

If the Bloc wants to play the violin to voters, here is a tune that would make Quebec vibrate.