Canadians might be surprised to learn that some of the most massive documents the government produces are still printed on paper, when everyone now uses these documents online. If so, Canadians will be glad to learn that we are putting a stop to these and other wasteful practices in every corner of government.
Because of our government’s responsible choices, we can eliminate the deficit through common-sense, moderate restraint. We have no need to resort to the drastic cuts being forced upon some other developed countries today. We have no need to undertake the radical austerity measures imposed by the federal government in the 1990s. In fact, our government will return to balanced budgets, while continuing sustainable increases in transfers for social programs. The savings we have identified are moderate.
They will amount to less than 2 per cent of federal program spending overall.
Ensuring the sustainability of Canada’s social programs
Our government has always acted responsibly to ensure the social programs Canadians count on will be there when they need them. As mentioned, we are increasing support for health care, education, and pensions at a sustainable level. Today we are also taking action to ensure the sustainability of Canada’s retirement income system.
Changes were made years ago to the Canada Pension Plan to ensure it would be sustainable. As a result it is sound and fully funded. Today it is clear we must take action to ensure the sustainability of the Old Age Security program, which is the largest spending program of the federal government.
The Old Age Security program was designed for a much different demographic future than Canada faces today. In the 1970s there were seven workers for every one person over the age of 65. In 20 years there will be only two. In 1970 life expectancy was age 69 for men and 76 for women. Today it is 79 for men and 83 for women. At the same time, Canada’s birth rate is falling.
The result is that Canadians are living longer and healthier. There are fewer workers to take their place when they retire. Canada has changed. Old Age Security must change with it, to serve the purpose it was intended to serve.
We will make gradual adjustments to the Old Age Security program, to ensure the next generation can count on it. These adjustments will not affect current recipients or those close to retirement. Starting in 2023 and ending in 2029, we will gradually increase the age of eligibility, from 65 to 67. This gradual approach will enable younger Canadians to plan ahead with confidence. We will also make the program more flexible for those approaching retirement. As of July 1, 2013, Canadians who prefer to keep working will be given the option to defer the start of benefits. This voluntary option will enable them to receive higher benefits as a result.
Beyond this, we will also ensure that government employee pension plans are sustainable and financially responsible. We will adjust these pension plans to be more in line with those available to Canadians working in the private sector. We will also increase the cost-share ratio for the pension plan for Members of Parliament and Senators, effective January 1, 2013.
Our government has already announced increases in transfers to the provinces, to put health care funding on a stable, sustainable path for the long term. Together with our adjustments to Old Age Security, we are ensuring that these crucial programs and services will be there for Canadians over the next generation.
Creating jobs now, while investing in skills training and filling gaps in Canada’s labour force Our focus in this budget is the long-term prosperity of our country. Still, as always, we are also responding to the immediate needs of our fellow Canadians. To create jobs now, we will extend by one year the Hiring Credit for Small Business–a practical, proven measure which encourages businesses to hire more workers.
We will provide new funding to improve border infrastructure. We will make new investments in local infrastructure, through Canada’s regional development agencies. We will also renew the fleet of the Canadian Coast Guard, now celebrating its 50th anniversary.
While creating jobs now, our government will provide new opportunities for Canadians to gain access to the labour market. We will keep helping older workers in transition to find good, new jobs. We will increase funding for skills training and career experiences, for young Canadians and for Canadians with disabilities.