The Conservative government is aiming its Old Age Security reform message at young Canadians this week, but a new poll shows it’s men and women in their 50s who are increasingly concerned about their pensions.
After spending several weeks reassuring seniors and Canadians “close to retirement” that they will not be affected by the still-unknown changes to OAS, Human Resources Minister Diane Finley shifted her message Tuesday, stressing the looming impact on young Canadians if demographic issues aren’t addressed.
In a speech to Toronto’s Canadian Club, Ms. Finley singled out a table of students as she warned that young Canadians will be burdened with a future of sky-high taxes and big debt unless Ottawa acts now to reduce the long-term costs of government programs.
The minister pointed to the dramatic changes in Canada over the coming decades as the baby boomer generation retires.
“As a result, the total cost of benefits will be increasingly unsustainable for tomorrow’s workers and taxpayers,” she said. “And it’s the next generations of Canadians who will have to shoulder the burden.”
But as the Conservative government prepares the public for a 2012 budget that will confirm the pension changes Ottawa has in mind, a new poll by Nanos Research shows growing anxiety among Canadians nearing their retirement years. The survey also finds the overall priorities of Canadians have shifted considerably in the past two years.
Concern over job creation and training is on the decline, while tax relief and pensions are climbing the priority list, according to the survey, which compares current sentiment with the priorities of Canadians two years ago, at the depths of the recession.
The Conservative government’s message has been focused on making OAS sustainable, but pollster Nik Nanos says it appears Canadians are becoming increasingly skeptical about all parts of their potential retirement support – including their workplace pensions and the actuarially sound Canada Pension Plan.
“The thing is, for average Canadians, when Conservatives talk about the demographic crunch, it’s not just limited to OAS. It’s basically a definition of the new reality that governments will have to face in the future,” he said. “It actually calls into question the sustainability of everything else.”
Respondents still ranked job creation as their No. 1 concern. However, only 32 per cent gave that answer, compared to 38 per cent in 2010. Tax relief is now the priority of 22 per cent of Canadians surveyed – up from 16 per cent – and strengthening pensions has become the top concern of 18 per cent of respondents – up from 13 per cent.
In 2010, only 13.9 per cent of Canadians surveyed aged 50-59 listed strengthening pensions as their No. 1 priority. Now 25.8 per cent of that age group lists it at No. 1, and a further 20.1 per cent list it as their second priority.
In her speech, Ms. Finley did not provide any new details of what OAS changes the government has in mind. She said that will come in the budget. She has said the government is looking at gradually raising the eligibility age to 67 from 65.
At one point, Finance Minister Jim Flaherty suggested changes will not be phased in until 2020, which would mean Canadians who are currently 57 or older likely would not be affected. But that is a hard line to draw among a group who are already worried they haven’t saved enough.
“I’ve seen how tough it’s been for my parents’ generation to make ends meet with just whatever they get right now, and any cuts to OAS will have a large impact, especially when the cost of living is going up,” said Melissa Bailey, 52, who runs her own mergers and acquisitions group in Surrey, B.C.
“I never expected the government to subsidize my retirement though,” Ms. Bailey added. “It would have been nice to expect something, but my generation, the baby boomers, I think just expect to work until we’re in the grave.”
Most Canadians qualify for OAS, and the average monthly payment is $508.35.
The latest Nanos Research survey of 1,001 Canadians was conducted online Feb. 7-11, 2012. Nanos Research asked the same questions in a Feb. 5-8, 2010, phone survey of 1,001 Canadians, which has a margin of error of 3.1 per cent, 19 times out of 20. The 2012 online survey was weighted according to census data. Mr. Nanos said no margin of error can be provided for such a survey.
With a report from Richard Blackwell in TorontoReport Typo/Error