There are two
objectives outlined by Canada’s retirement income system: (1) to ensure that no
senior in Canada has to live in poverty, and (2) to ensure that the standard of
living of the retiree is maintained following their retirement (Battle,
Torjman, & Mendelson, 2012). Canada’s pension system is divided into three
levels that are intended to fill these objectives. The first level is comprised
of old age security (OAS), the guaranteed income supplement (GIS), and an
allowance. OAS is contributed to most individuals over the age of 65; GIS is an
income-tested supplement targeted at seniors living in poverty; and the allowances
are intended for older adults age 60-64 whose spouses are currently receiving OAS
and GIS as well as those who are widowed (Battle et al., 2012). The second level of the system is Canada’s
pension plan (CPP), and in Quebec, the QPP. Finally the third level in the
pension system is comprised of registered pension plans whose medium is
registered retirement savings plans (RRSPs). The first tier of the system, OAS
in particular, is the largest aspect of the system distributing over 31 billion
dollars this year alone (Battle et al., 2012).
Under the
Conservative party in Canada, we have seen several changes to the intent of
distribution. The objectives outlined above remain intact; however, I would
argue that the actions and intent of the conservative government speak against
these goals. From a social democratic perspective these goals should be adhered
to, as they are essential in maintaining income equality and protection. The
budget released earlier this year does not uphold these objectives.
Finance minister
Jim Flaherty announced changes to OAS and GIS in this year’s budget. The major
change under scrutiny is the increase in the age of eligibility from 65 to 67
to begin in 2023 (Payton, 2012). This serves to hammer those living in poverty
who may not be able to afford the extra two years. From a social democratic perspective,
the changes outlined in the budget are counter to the goals of equality that we
set in Canada. It works for those who can afford it. Those in secure positions,
who can remain in the labour market also have the opportunity to defer their
benefits; thus increasing their benefits come retirement (Payton, 2012).
Personally, when
I think of this through a social democratic lens, I think of the people who
aren’t employed and those struggling with the increase of precarious employment.
Nearly all marginalized populations would fall under these categories; women,
people with disabilities, immigrants, trade workers, welfare recipients, and so
on. People in these categories will be hit hardest as they will be forced to count
an extra 730 days. This feels like an eternity when you are just scrapping by. According
to Tom Mulcair, the NDP leader as of May of last year, “…in a country as
wealthy as Canada it is absolutely inexcusable to have hundreds of thousands of
seniors living below the poverty line…..we’re one of the only countries that
doesn’t protect pensions in the case of bankruptcy or insolvency…that’s
entirely unacceptable.” (“NDP would restore OAS to 65, says Mulcair”, 2012). The
NDP (who, of the parties in Canada, align most closely with social democratic
ideals) would like to see these changes revoked. They would also like to see
more protection of the individuals working precarious jobs.
I believe these
changes are regressive. I think of Feudal Europe, when older adults were
expected to work well into old age, despite declining health and well-being. Today,
these changes may be okay for those who can afford to spend a few extra years
in their penthouse offices. For those who are working the front lines, working
physical labour, fearing the permanency of their jobs, or who are unable to
maintain employment, these changes only lead to perpetuate the concerns around their
protection and security.
Thank you,
Kayla T.
References
Battle, K., Torjman, S., & Mendelson,
M. (2012). Old age insecurity? Caledon
Institute of Social Policy. Ottawa, Ontario. Retrieved from: http://www.caledoninst.org/Publications/PDF/983ENG.pdf
Payton, L. (2012 Mar.). Old age security
changes confirmed in budget. CBC News. Retrieved
from: http://www.cbc.ca/news/politics/story/2012/03/29/federalbudget-main.html
The Canadian Press, (2012 Oct.). NDP would
restore OAS to 65, says Mulcair. Republished
from the Winnipeg Free Press print edition October 27, 2012 A23. Retrieved
from: http://www.winnipegfreepress.com/canada/ndp-would--restore-oas-to-65-says-mulcair-176076051.html
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