{"id":640781,"date":"2026-05-01T12:53:14","date_gmt":"2026-05-01T12:53:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/640781\/"},"modified":"2026-05-01T12:53:14","modified_gmt":"2026-05-01T12:53:14","slug":"modernizing-old-age-security-would-free-billions-for-ottawa-to-address-affordability","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/640781\/","title":{"rendered":"Modernizing Old Age Security would free billions for Ottawa to address affordability"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Trimming OAS benefits by about $3,000 after tax for retirees with household incomes above $100,000 would protect or improve benefits for roughly 80 per cent of seniors.Thinkstock<\/p>\n

Fiscal updates are meant to show how governments will use scarce dollars to meet the moment. This week\u2019s spring economic statement<\/a> shows something else: The Carney government missed another opportunity to deliver the biggest improvements to affordability and income security in decades \u2013 without raising tax rates or the deficit.<\/p>\n

Consider what was left on the table.<\/p>\n

Canada could have eliminated seniors\u2019 poverty by adding $5,000 for each of the 400,000 older Canadians below the poverty line. <\/p>\n

We could have delivered a $3,000 annual rent subsidy to a million young people struggling to afford a place to live. <\/p>\n

We could have maintained the full $4,200 Canada Student Grant for a million postsecondary students, instead of cutting it to $3,000 next year. <\/p>\n

We could have subsidized 100,000 more $10-a-day child care spaces, meeting Ottawa\u2019s target of 250,000<\/a>.<\/p>\n

We could have expanded the Youth Climate Corps<\/a> from a 1,000-person pilot to tens of thousands \u2013 helping young people build skills, earn a living wage, strengthen climate resilience, and reduce unemployment.<\/p>\n

All of this could have been paid for by modernizing Canada\u2019s largest income subsidy<\/a>, Old Age Security.<\/p>\n

According to the latest figures, OAS cost $80.3-billion in 2024-25 and is projected to reach $108.5-billion by 2030-31. It absorbs more new public spending than any other federal program. <\/p>\n

About 16 per cent of OAS spending goes to retirees with household incomes above $100,000 \u2013 often delivering benefits that exceed $18,000 per year. <\/p>\n

By 2030, that share alone will total roughly $17.5-billion annually flowing to retirees with six-figure incomes.<\/p>\n

That number is more than double what Ottawa spends on $10-a-day child care. <\/p>\n

It is nearly 10 times larger than this spring\u2019s investments to make it easier to afford a home. <\/p>\n

It dwarfs all spending announced in the spring statement for groceries supports, trades training and clean growth \u2013 combined.<\/p>\n

It\u2019s hundreds of times larger than the Youth Climate Corps.<\/p>\n

And remember: This is just the portion of OAS going to financially secure retirees with six-figure incomes.<\/p>\n

At a time when Ottawa projects deficits above $50-billion annually for years to come, it is essential to ask: Is this really the best use of public dollars?<\/p>\n

Especially when the alternative is so straightforward.<\/p>\n

It\u2019s time to trim OAS benefits by about $3,000 after tax for retirees with household incomes above $100,000. This change would protect or improve benefits for roughly 80 per cent of seniors, while reducing subsidies for the top 20 per cent of OAS recipients.<\/p>\n

This alternative would not cut OAS spending. It would simply slow its growth: Projected spending would be closer to $100-billion instead of $108.5-billion by the end of the decade.<\/p>\n

The roughly $9-billion in annual savings would be drawn entirely from retired households whose incomes are 35 per cent above the national median<\/a>.<\/p>\n

That is enough to do everything listed above: Eliminate seniors\u2019 poverty, strengthen student supports, expand child care, help young renters and invest in youth employment to make Canada more climate resilient \u2013 all at once.<\/p>\n

Canadians are ready for this change. Polling<\/a> consistently shows that about three-quarters support modernizing OAS in this way, including three-quarters of retirees.<\/p>\n

The case becomes even clearer when compared with Ottawa\u2019s broader fiscal efforts. The federal government is working hard to generate about $12-billion in annual savings through its comprehensive expenditure review. <\/p>\n

But one well-designed reform to OAS could deliver nearly as much on its own.<\/p>\n

At a time when we face domestic affordability pressures, geopolitical uncertainty and rising risks from extreme weather, we cannot afford to overlook changes that deliver this scale of impact.<\/p>\n

We should double our ambition by pairing the careful spending review with targeted OAS reforms that unlock major gains. <\/p>\n

I\u2019m not suggesting that a six-figure household income in retirement makes someone \u201crich,\u201d and I know some would prefer to make fiscal room by taxing fortunes above $10-million. But even if adopted, that approach would not solve Canada\u2019s fiscal or affordability challenges. The NDP proposed <\/a>it in the last election, and it would raise about $23-billion a year. That\u2019s less than half the current deficit, and less than the projected growth in OAS spending over the next five years.<\/p>\n

If the goal is to build a stronger Canada in which all seniors live in dignity and younger generations can afford to build a good life, then modernizing OAS is the clearest place to start.<\/p>\n

Until that happens, we will keep tying one fiscal hand behind our back \u2013 leaving transformative improvements to affordability within reach, but out of grasp. <\/p>\n

Dr. Paul Kershaw is a policy professor at UBC and founder of Generation Squeeze<\/a>, Canada\u2019s leading voice for generational fairness. You can follow Gen Squeeze on X<\/a>, Facebook<\/a>, Bluesky<\/a>, and Instagram<\/a>, as well as subscribe to Paul\u2019s Hard Truths podcast.<\/a><\/p>\n