Many of you wrote me this week on Prime Minister Stephen Harper’s recent comments on the Old Age Pension. Some seniors have been asking if their old age security cheque will remain the same, and others close to retirement have been wondering whether old age security will be there for them when they turn 65. The answer to both questions, is YES.

Our Government is committed to ensuring the retirement security of Canadians in the long-term, which is why we have opened the discussion now. The issue of pension sustainability is on the minds of many Canadians and has in fact been raised by several of you during my current pre-budget consultations.

In Canada, there are two important programs that provide financial support to older Canadians: CPP/QPP and OAS.

CPP is funded through premiums that working Canadians pay with each paycheque and is on a secure and sustainable path.

OAS is funded primarily through taxes on working people.

The maximum basic amount paid out monthly by Old Age Security (OAS) is $540.12. Parts of that can be clawed back for those whose annual net income is more than $66,335. For those at the low end of the economic scale, the Guaranteed Income Supplement and other allowances can boost the over-all benefit.

In 1975 there were seven working taxpayers for every senior.  Because our population is getting older, today there are only four working-age Canadians for each senior.  By 2030, the total number of seniors will nearly double, leaving only two working-age Canadians for each senior.  Amidst these changing demographics, the annual cost of the Old Age Security program is projected to increase from $36 billion in 2010 to $108 billion in 2030.

OAS is unsustainable on its current course. Because of Canada’s aging population, if changes are not made to the Old Age Security program, it will become unsustainable in the long-term. Failure to make important decisions now will put the program in jeopardy for future generations.

Just last week, a Standard and Poor’s report, Mounting Medical Care Spending Could Be Harmful to the G-20’s Credit Health, stated  that “…age-related costs — pensions, health care, unemployment insurance and long-term care — would push Canada’s net debt to grow by 260 per cent from 2030 to 2050.”

The OAS program was built when Canadians were not living the longer, healthier lives they are today.

For example, the number of Canadians over the age of 65 will increase from 4.7 million to 9.3 million over the next 20 years.

When Old Age Security was introduced in 1952 the age of eligibility was 70. The life expectancy at the time was 66 for men and 71 for women.

The age of eligibility for Old Age Security changed in 1965 from 70 to 65. The age expectancy at that time was 68 for men and 75 for women.

Canada must act now, with plenty of advance notice, or it will face the same decision as Greece and Italy – cuts to benefits because we cannot pay our bills.

Other countries have already introduced measures to take action and raise the retirement age. Specific examples are Germany and Australia, raising the age from 65 to 67, over a number of years.

Our Government will act to protect OAS.  We will not put the financial security and well-being of our seniors at risk.

And we will take balanced, responsible, and prudent action to ensure OAS remains sustainable for future generations of Canadians.

Our Government recognizes the contributions our seniors have made towards building our country, and we are committed to ensuring their quality of life is maintained. Since coming to office, our government has:

• Brought in the biggest increase in over twenty five years to the Guaranteed Income Supplement (GIS), $306 million, for the most vulnerable seniors to help lift them out of poverty,
• Introduced pension income splitting and increased the age credit,
• Introduced innovative new programs such as the tax-free savings account and the PRPP to help Canadians save for retirement.

As a Parliamentarian, starting a conversation on the sustainability of the OAS program may not be the most popular. But for the sake of our children and grandchildren, it is a discussion too important to ignore. As Canadians, we need to have a frank look at all sides. I ask that you examine the issues, and send me your opinion. I assure you that I will take your input to Ottawa. A special OAS response form can be downloaded from my website at www.loisbrown.ca. Remember you can mail to Members of Parliament for free; no postage is necessary.

I can be reached by email at Lois.Brown@parl.gc.ca, by fax at 905-953-7527 or in person or mail at 16600 Bayview Avenue, Suite 206, Newmarket, Ontario L3X 1Z9. You can also call me at 905-953-7515. I look forward to hearing from you.