A recent report by Canada’s Auditor General highlights significant gaps in the federal government’s approach to supporting seniors through programs like Old Age Security (OAS) and the Guaranteed Income Supplement (GIS). The findings reveal that Employment and Social Development Canada (ESDC), the department responsible for these benefits, lacks a clear understanding of whether its programs are effectively meeting the financial needs of Canada’s growing senior population.
Table of Contents
The Auditor General’s Findings
The report states that ESDC collects substantial data on seniors but has failed to analyze it effectively. This oversight means the department cannot determine if existing programs address the needs of seniors or if there are critical gaps in support.
“As the population of seniors in Canada continues to grow, Employment and Social Development Canada needs to strengthen its analysis to ensure that support programs are meeting the evolving needs of seniors,” said Auditor General Karen Hogan.
The Growing Senior Population in Canada
The number of seniors in Canada is projected to double from 7 million in 2021 to over 14 million by 2061, underscoring the urgent need for better financial support systems.
Rising Costs of Senior Benefits
Benefits for seniors, including OAS and GIS, make up the largest and fastest-growing portion of the federal budget. Spending on these programs is expected to rise dramatically:
- 2024: $88 billion
- 2040: $158.9 billion
- 2060: $276.5 billion
This growth reflects both the aging population and increased program costs, making it imperative for the government to evaluate the efficiency of its spending.
What Is Old Age Security (OAS)?
The OAS pension is a monthly payment available to Canadians aged 65 and older. Unlike the Canada Pension Plan (CPP), it does not require recipients to have worked in Canada, only that they have lived in the country for at least 10 years.
Recent Changes to OAS
The government has made several adjustments to OAS in recent years based on limited analyses:
- 2016: Increased GIS payments for single seniors.
- 2020: Enhanced GIS earnings exemption.
- 2022: Introduced a 10% OAS increase for seniors aged 75 and over.
Despite these changes, critics argue the program requires a broader rethink to better address seniors’ financial challenges.
Advocates Call for a Rethink
Paul Kershaw, a professor at the University of British Columbia and founder of the advocacy group Generation Squeeze, criticized ESDC for failing to update its approach to OAS since its inception.
“It’s pretty stunning to have the Auditor General find that Ottawa bureaucrats don’t really have any clear idea whether or not the federal government’s most expensive program is meeting its objectives,” Kershaw said.
Poverty Among Seniors
Seniors currently have the lowest poverty rate among age groups in Canada, with only 6% living in poverty compared to 11% of adults aged 18 to 64. However, approximately 500,000 Canadian seniors still live below the poverty line.
Kershaw suggests that the government could redistribute OAS payments more effectively. For example, adjusting the OAS clawback threshold could save $7 billion annually by reducing benefits for seniors with six-figure incomes, redirecting those funds to eliminate poverty among the most vulnerable seniors.
Calls for Increased Support
The Bloc Québécois has proposed a 10% increase in OAS payments for seniors aged 65 to 74, mirroring the 2022 increase for seniors over 75. While the proposal aims to support younger seniors, Kershaw has called it “poorly designed,” emphasizing the need to target financial aid where it is most needed.
Government Response
In light of the Auditor General’s findings, Federal Minister of Labour and Seniors Steven MacKinnon stated that ESDC will strengthen its analysis of OAS to ensure it aligns with the broader goals of Canada’s retirement income system.
“The department’s work on GIS has influenced positive changes in the past,” MacKinnon said, “and we will apply similar diligence to OAS.”
Smart Ways to Reduce or Avoid the OAS Clawback
Will All Seniors Get an Increase in OAS 2025: Recent Adjustments and Eligibility
How to Cancel CPP and OAS Benefits After a Death: A Complete Guide
OAS Payment Dates 2025: Increases and Amounts Explained
How Much Will CPP and OAS Increase in 2025? A Comprehensive Guide for Canadian Retirees
The Path Forward
With Canada’s senior population growing rapidly, the need for effective, data-driven policies is critical. Better analysis and recalibration of OAS could ensure that limited resources are used efficiently, helping to eliminate senior poverty without significantly increasing program costs.
As the government grapples with rising expenses, experts and advocates alike urge policymakers to focus on innovative solutions to meet the evolving needs of Canada’s elderly population.
Leave a Reply