In light of coming changes to Canada’s Old Age Security plan, Dan Albas says he fully supports promised tweaks to MPs’ pension plans that will make them “more respectful of the taxpayer.”
At present, federal politicians contribute about $1 to their pensions for every $5 pitched in by taxpayers, a ratio the Conservative government wants to see lowered to 1:1 for members of the next session of Parliament, likely after the 2015 federal election.
“I have been supportive of changing the current pension plan. I believe we need to move toward something that is more respectful of the taxpayer. I’ve been very vocal in government caucus on this,” said Albas, the MP for Okanagan Coquihalla.
He was more ambivalent on the other area of MPs’ pensions that has also drawn fresh fire: the ability of eligible members to begin drawing a cheque at age 55. But Albas would not say to what age he thinks that number should be raised, citing the need for proper consultation first.
“Giving a number and then not following up on it, to me, that would be disrespectful to taxpayers,” he said.
The Conservatives have, however, settled on a number for those who will draw on the Old Age Security program. The latest federal budget announced a gradual shift in the age of eligibility from 65 to 67. The change will not affect those born before 1958 and will be phased in gradually beginning in 2023.
Albas outlined the changes when he appeared Thursday at a committee meeting of the Regional District of Okanagan Similkameen.
According to the government’s figures, the cost of OAS will grow from $38 billion in 2011 to $108 billion by 2030. However, the ratio of working-age Canadians to seniors is expected to drop from 4:1 to 2:1 over that same period, placing a huge strain on the system.
“At some point,” Albas said, “government does have to take a look at it and say, ‘What is our ability to pay?”
RDOS director John Vassilaki, also a Penticton councillor, said increasing the age of eligibility is going to widen the spread between the haves and have-nots.
“Those that aren’t as well off as some of us are going to have problems down the road, and it’s going to make great hardships for those people that either didn’t have the right jobs to begin with or didn’t save enough for their retirement,” Vassilaki said.
“It’s a good thing that (the increase in age of eligibility) is not going to take effect for 12, 15 years from now, because we have to babysit a lot of people and try to make them save for the future.”
Rural Oliver director Allan Patton took a contrarian view.
He said baby boomers such as himself will be responsible for the anticipated strain on the OAS system, so the age of eligibility should be raised immediately.
“We’re the ones that are going to affect the next generation’s ability to pay for us,” Patton said. “It should almost be there now to really attack that problem that our generation is creating.”