Canada's Prime Minister Stephen Harper addresses a session at the World Economic Forum (WEF) in Davos, January 26, 2012.Reuters
This country is going to look so very different 20 years from now – a lot more grey hair, or no hair. Good for Prime Minister Stephen Harper for raising the tough challenges now. The opposition parties act as if he wanted to cast millions of seniors into penury. They would surely toss him into political oblivion if he did.
The changing demographics, obvious to the point of staring many of us in the face – each morning in the mirror –will oblige this country to do a wide-ranging examination of its social-support systems. And more than that, of its wealth-generating capacity, to pay for the supports. Mr. Harper, speaking in Davos last week, raised both sides of the coin: the difficulties of paying for Old Age Security on the one hand, and the need to improve the country's performance in science and technology, and to expand trade, on the other.
The challenges of a greying society lend themselves to fear-mongering. Interim Liberal Leader Bob Rae accused Mr. Harper of "a politics of abandonment, because he's abandoning future generations of seniors." NDP MP Chris Charlton said the government is "talking about gutting the OAS." Mr. Harper sought to dampen any damage from his open-ended statements in Davos, saying he has no plans to cut transfers to individuals or provinces. A disproportionate part of his support is from older Canadians; he is unlikely to blow that support to smithereens by taking an axe to the OAS.
At the moment, 7.5 million Canadians are left without private workplace pensions, and any changes to the pension system seem frightening. The government is moving to fill that gap by allowing for pooled retirement pension plans focused on small business.
Canada is dealing from a position of relative strength at the moment, and has time to phase in changes before 2030, when 9.3 million Canadians will receive the OAS, at a cost of $108-billion, funded from general tax revenues – up from 4.7 million people and $36.5-billion (in 2010). The challenge of ensuring that the retirement-income system and other supports are on a secure footing for the next generation is one that no government can avoid.