Retirement income won't be cut, Harper says

Old Age Security won't be cut, but the government will take a look at the challenges facing the retirement income system, Prime Minister Stephen Harper said Monday.

Confusion over possible changes to Old Age Security

Prime Minister Stephen Harper says old age security won't be cut, despite a speech he gave last week in which he said the government would look at ways to make the retirement income system sustainable. (Adrian Wyld/Canadian Press)

The government isn't going to cut Old Age Security but will take a look at the "challenges" facing the retirement income system, Prime Minister Stephen Harper said Monday.

Other ministers in the government, however, specified there wouldn't be cuts for anyone currently receiving OAS.

In the first question period since MPs left in December — and his first comments since suggesting last week there could be changes to Canada's retirement income system — Harper said there would be no cuts to the OAS. 

"We will ensure our vital programs are sustainable in the long-term and for future generations," Harper said.

"The reality is that we aren’t cutting programs for seniors."

Last week in a speech in Davos, Switzerland, Prime Minister Stephen Harper hinted at possible changes to Old Age Security benefits. The ratio of workers to retired people will decline from four to one to two to one by 2030, leaving fewer people to fund OAS through their taxes.

In the speech, Harper said Canada's "demographics also constitute a threat to the social programs and services that Canadians cherish," but the Canada Pension Plan is fully funded and doesn't need to be changed.

"We have already taken steps to limit the growth of our health-care spending over that period," he said. "We must do the same for our retirement income system."

"For those elements of the system that are not funded, we will make the changes necessary to ensure sustainability for the next generation while not affecting current recipients."

Confusion over possibility of cuts

The brief mention about retirement income in Harper's speech left opposition parties speculating on what it could mean.

Opposition parties seized on the issue in question period Monday. They also took advantage of a scheduled debate on pooled registered retirement plans to rail against potential cuts.

Interim Liberal Leader Bob Rae said Harper has always promised not to cut transfers to the provinces or to people.

"It's a politics of abandonment because he's abandoning future generations of seniors, he's abandoning provinces with respect to their increased obligations, and let's not forget the fact that the majority of people on OAS, plus Guaranteed Income Supplement, are making less than $25,000 a year," Rae said.

"This is a direct statement saying that the future of this country is going to involve ... a bigger gap between rich and poor."

Earlier in the day, NDP caucus chair Peter Julian reminded Conservatives about the voting power of seniors.

Julian said the party is ready to fight the government on pensions and other issues over the next few months. He said the government didn't campaign on cutting or changing OAS in the last election, less than a year ago, and that it has to consider public opinion. Julian said seniors in his riding told him over the weekend they'd never vote Conservative again if they cut retirement income.


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"For the Conservatives to say, 'we just don't care about public opinion for the next few years,' I think would be a primary mistake. I don't think they're that stupid," Julian said.

"Our job is to make sure that Canadians are aware that their points of view are being represented in the House of Commons," he said.

More seniors and middle-aged Canadians consistently turn out to vote in elections than younger Canadians.

"All seniors should rest assured those that are collecting OAS today will continue to collect it without any change. Our focus is on the medium- and the long-term and ensuring the sustainability of the system for 10 years, 20 years, 30 years from now," government House leader Peter Van Loan said Monday. 

"For those who are retired today or approaching retirement, they can rest assured there will be no changes that will affect their benefits."

Greek problems cited

Van Loan said Canada needs to make changes now or risk an unstable economy.

"If you want to know what the consequences are, you only need to look to Greece," he said.

But Yanis Varoufakis, a professor of economics at the University of Athens, said that is "spectacularly wrong."

In an interview last week with the CBC's James Fitz-Morris, Varoufakis said if that was right, Germany should have serious sovereign debt problems and Ireland shouldn’t, but the reverse is true.

"The problem in Europe is not debt. Debt is a symptom," he said.