OAS, the Budget, and the Baby Boomers

The Budget justifies raising the age of eligibility for OAS and GIS on the grounds that  the long-term fiscal sustainability of the program is being undermined by rising life expectancy.

No estimates of savings are provided. They will be very modest.

Given that average life expectancy at age 65 is 20 years, raising the eligibility age by two years could only save a maximum of 10% of projected spending on future retirees if implemented immediately.

However, the government proposes to phase in the increased eligibility age between 2023 and 2029 which will hugely reduce any savings relative to current projections.

According to the latest OAS Actuarial Report, OAS/GIS expenditures will rise from 2.43% of GDP today, to a peak of 3.16% in 2030, immediately after the full impact of the raised eligibility age kicks in in 2029.

OAS/GIS expenditures will already have hit 2.91% of GDP in 2023 when the phased in increase begins.

Put another way, the increased eligibility age will not impact most baby boomers. The impact will be on later age cohorts.

I fail entirely to see how the goal of inter-generational fairness is served by undermining retirement income security for those aged under 54 today.

Indeed, in the name of fairness, people of my generation should be arguing that those who follow us get OAS at the same age as us.

Re increasing life expectancy, the fact that longevity at age 65 varies significantly by social class is ignored. The reality is that low income seniors, those most impacted by the change, have not shared the average increase in life expectancy which is highlighted in the Budget.


  1. very glad that CCPA is pointing out that poverty affects lifespan. Also true that Boomers bump in numbers will not last more than five years approximately.

  2. I am 40. When I was in junior high we were told that we would very likely never be able to retire. As generation Xers we would change our careers many times, be plagued by insecurities and would not have the opportunities afforded to the older boomers, because we always followed in their shadow. I have prepared myself for a rise in the retirement age for over 25 years now. For those older than me to say they never saw this coming is disingenuous. Sure nobody wants to keep working, but we have to do our duty, don’t we?

    I am happy to pay my fair share, but I’ve never had a job with benefits, or even a full-time, non-consulting job. It is just my reality. I’m not doing poorly, but I can’t help but doubt the younger generations’ ability to support all those seniors who are living longer and longer and healthier and healthier lives, given that the rich pay less and less income tax, and our healthy food options become fewer and fewer. A generation of baristas and sandwich artists can’t shoulder the burden, and we clearly cannot rely on the financial sector to do the right thing by society.

    With so many minimum wage, service industry jobs replacing stable fulltime jobs, where will the income taxes come from?

    The kicker is hearing the federal government’s plan to reduce the public service through attrition. Really? We just won’t fill the top jobs held by the most senior, experienced members of the administration? That seems to be very short-sighted decision-making that will make the collective challenges we face all the more difficult to tackle, if that accumulated wisdom is unable to be shared and passed down. It is also that many fewer good jobs to support solid, taxpaying families.

    It also scares me to think of the voting power that the silver tsunami wields in this country. The likelihood that they will continue to vote Conservative is very great.

  3. Good concise observations, thanks.

    The potential benefits of this far off change should be estimated; Flaherty’ s deficiency.

    But the costs can be assumed to fall on: (1) the poor within gen x and gen y, for whom the OAS will be an important source of income; ans (2) provincial governments (and the CPP disablility pension scheme), who will have to carry large numbers of income assistance recipients for two more years.

  4. We might wish to view pass retirement age. It was set at 67, when the baby-boomers were young folks, and reformed to 65. Check that one out. OOPS!

  5. There is no justification whatsoever to raise the age one can receive OAS from 65 to 67, given OAS is designed to be an income supplement for needy seniors period. Take my 93 year old mother’s income for example, which happens to be in excess of $70,954 annually, more than I earn. I submit to you with the income my mom earns, she is far from being “a needy senior” and as such, should not qualify for nor be receiving any OAS monies period. Therefore, return the moronic and completely unwarranted OAS age increase back to 65 while eliminating the payment of any OAS to seniors with incomes of $70,954 or more for now until a better income definition of “a needy senior” can be determined.

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