It all happened so fast. Even before my birthday, a letter from Service Canada stated, "Your Canada Pension Plan Retirement Pension has been approved." Well okay, I don't really need it; but since my employers and I paid into it for four decades, it doesn't come from taxpayers. Soon after came another letter from Service Canada saying, "We have approved your Old Age Security Pension." Old age - what does that have to do with me? And why should I get the OAS? Four decades of employment and sound investing provide for my security.
But if I had reached age 65 without financial security, I would qualify for both the OAS and the Guaranteed Income Supplement. These programs cost the federal government about $33-billion a year, and the cost is quickly rising.
Service Canada kindly included a card I could use to prove I had reached "old age." I wondered what it was for, until, standing in line at a pharmacy, the clerk asked the gentleman in front of me if he had a senior's card. That magic card meant a 10-per-cent discount. I began to notice people were producing the cards for lower prices for movies, hotels, air travel and more.
I haven't yet been asked the dreaded "Are you a senior?" but I've already decided to refuse the discount as a matter of principle. What principle? My business career has taught me that discounts given to any particular group must be made up for by those not receiving the lower price. So accepting seniors' discounts means that others - younger people working to raise families and make mortgage payments, single parents and struggling students - have to pay more. (Though I know my one-man anti-discount campaign won't matter much, except to me.)
Then there are the government subsidies for seniors, such as transit passes, affordable housing, auto insurance, and reduced health-care premiums. Such programs have merit, but every government subsidy a senior citizen receives has to be paid for by working taxpayers.
Then there is the biggest taxpayer burden of all, "free" health care. Despite unsustainable deficit spending by every province, health care continues to eat into financing of education, social services and infrastructure. And older Canadians are the dominant drivers of health care costs. Our health care system as we know it is doomed. Ted Fishman's recent book, Shock of Gray, shows why.
First, the "boomer bulge," followed by the collapsing birth rates in developed countries, means a rising proportion of senior citizens. We now have five working-age Canadians for every retiree. Statistics Canada estimates that by 2036, the ratio will fall to 2.5-to-1, meaning there will be only half as many workers to pay for the benefits seniors have come to expect.
Secondly, those seniors have a long, and increasing, life expectancy. Global life expectancy rose from 20 years in Roman times to 30 in the year 1900. Remarkably, in just over one century, global life expectancy has more than doubled, to 64. And it's much higher in developed countries. Canada's current life expectancy is almost 81. The Canadian Medical Association estimates that 2,500 new long-term care facilities will be needed to accommodate the expected doubling of Canada's 65-plus population over the next two decades.
"An aging world is an increasingly dependent world," Mr. Fishman writes. "It will demand that a growing portion of the population devote their lives to the growing share of the people who need care."
How can pensions for all, subsidized seniors' services, and free health care for all be sustained? The answer is that they cannot be. Here's some food for thought:
The adage that "75 is the new 65" is certainly true. Yet, the age at which Canadians officially reach "old age" hasn't changed in more than a half-century.
Canada's health care system has become unsupportable financially, and sometimes dangerously inaccessible. As in the case of those seniors' discounts, why should everyone be required to accept free health care? Canadians should have the option of paying for their own medical care, and physicians should be allowed to provide it.
The shock of the greying of Canada is upon us. It's a shock that will see serious erosion of the support seniors have come to expect unless we focus the dollars on those who need help, and not on those who don't.
Gwyn Morgan