Looking beyond the numbers

Simon's picture

Speculation abounds as to what changes the government has in store as it continues in its stated efforts to cut spending, eliminate “inefficiencies”, and encourage economic growth.

Last week at the World Economic Forum in Davos, Switzerland, Prime Minister Harper announced that Canada’s retirement income system will be next in a long line of government programs facing reforms. It has been widely rumoured that these reforms could include an increase in the eligibility age or cuts in benefits to Old Age Security (OAS), a program that has played a major role in keeping millions of Canadian seniors out of poverty.

The rationale seems sound enough: Canada’s population is aging and people are living longer, meaning increasing strains will be put on the program (costs for OAS are expected to grow from 2.4% of GDP today to 3.14% in 2030) while there are fewer taxpayers to fund it. The long-term sustainability of OAS is an important concern that merits discussion.

Yet we can’t lose sight of the fact that those with the most to lose in this discussion of prudent finances are some of the most vulnerable in society. For many low-income seniors, the OAS, along with the Guaranteed Income Supplement (GIS) top-up, is the difference between a life of poverty and an income that allows them to “get by” (however narrowly). Given that, almost by definition, low-income seniors are unable to work as a means of providing an income, increasing the eligibility age or reducing the benefit amount would place their well-being and dignity in serious peril. What looks like an easy decision on paper suddenly becomes much more complex.

While proposals like this may seem fiscally responsible, lowering or delaying benefits for poor seniors is an affront to public justice. While the government’s investments in the OAS and GIS have had a major impact in reducing poverty rates amongst seniors (to about 5%), Campaign 2000 has recently noted that more seniors are living in poverty (as measured by the Low-Income Cut Off After-Tax) since the onset of the 2008-09 recession. Now is not the time to be reducing benefits and saving money off the backs of the poor. Surely there are better ways to balance the books.

As CPJ has argued before, financial discussions and decisions are not, nor should they be, value-neutral. What we do with our money – whether as families or countries – reflects our priorities, commitments and vision of the sort of world we want to live in. What sort of responsibility do we believe we have to the vulnerable and disadvantaged? What implications do our financial decisions have on the common good?

The annual federal budget is one of the most important ways that we as a nation chart out such values. “What our elected politicians think we want them to do on behalf of our communities gets expressed in budgets.” says CPJ’s Executive Director Joe Gunn. “Budgets tell us who have been listened to, who have been forgotten, who counts, and who matters not.”1

The 2012 budget will be tabled soon. What can we expect from it? What values will it reflect? Now is the time to have your say.

This week is your last chance to participate in the government’s online pre-budget consultation process. While many organizations, including CPJ, have already submitted pre-budget briefs to the House of Commons Finance Committee, this public consultation process allows you to have a direct say about the things that matter to you.

It’s easy to be cynical about the value of public consultation exercises like this (Will they really listen to what I have to say? Haven’t the decisions already been made?), yet the truth of the matter is that governments – even majorities – really do care about public opinion. At the end of the day, politicians want to get re-elected. They’re constantly feeling the waters to gauge public reaction, and the pre-budget consultations are an important way they do that.

Have your doubts? Consider the example of Solange Denis, the feisty senior who, in 1985, shouted “you lied to us” at then Prime Minister Brian Mulroney over his proposal to de-index OAS. The confrontation was caught on camera and soon became the rallying cry of thousands of seniors across the country. They told Mulroney they’d never vote for the PC party again. With a majority government in place, there was nothing really to compel Mulroney to back down except public opinion. Yet he listened and retreated.

While the details haven’t been released, Canadians have been given hints that Budget 2012 will include $4 billion - $8 billion in program cuts across federal departments and further corporate tax cuts representing some $3 billion a year in lost revenue. What will be the social implications of such measures?

How can we balance legitimate economic concerns with a vision of loving one’s neighbour and ensuring the common good? Please take the time to share your vision of Canada!

  1. 1. Joe Gunn, Western Catholic Reporter, March 2011
Simon is CPJ's Socio-Economic Policy Analyst.

Comments

I agree with your comments and feel we should be sending letters to our MP's to get them to understand the impact the change to OAS will have on upcoming seniors especially women where it has been proven that most senior women live in poverty and we will now be increasing the poverty for them. The Government should look more closely at the OAS clawblacks and chaning that part of the system rather than increase the age requirements. Our Canadian society and values have changed and when it hurts the people who need it most, then we are not being Canadian.

Submitted by August Guillaume on
Thanks for this excellent report. I just managed to put a few comments on the consultation process. I write e-mails to Harper or other ministers with copy to my PC MP since Conservative MP's are not allowed to reply without asking the PM office first. Not quite the type of government I like to have!!

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