Canadian government pushed to boost seniors benefit as federal budget looms

For many Canadian seniors, the weekly grocery trip has become an unwelcome competition – a fight between rising food prices and their limited, fixed incomes.

“It’s challenging,” says one senior.

“You have to find something hopefully different every day… with a fixed income, you really have to budget and budget hard. You’re very careful, you have to count your pennies.”

This struggle isn’t lost on policymakers. Recognizing the financial strain many seniors face, Members of Parliament (MPs) on the House of Commons finance committee have proposed boosting elderly benefits. Their recommendations include:

• Increasing the Guaranteed Income Supplement (GIS) by $50 per month.
• Raising Old Age Security (OAS) by 10% for seniors aged 65 to 74.

These proposals aim to address the harsh reality faced by many seniors:

“No tomatoes, no onions, everything else you got it,” says another senior, highlighting how rising grocery costs force them to cut back on essentials.

The need to support seniors goes beyond just financial assistance. Business groups are calling for measures to address labor shortages by encouraging seniors to re-enter the workforce. With the Baby Boomer generation exiting the job market in droves, concerns are mounting about a future labor gap.

“We’ve just seen the start of this,” says a business representative.

“We’re really worried about where the labor force is going to come from in the future.”

The finance committee has acknowledged these concerns. They have recommended that Finance Minister Chrystia Freeland adjust tax rates to incentivize seniors to return to work. This could involve measures like deferring Canada Pension Plan (CPP) payments or reducing clawbacks applied to modest incomes.

While boosting benefits would offer immediate relief, it comes at a cost. The estimated annual price tag for increased payments is a hefty $8.1 billion. This puts the proposal at odds with Minister Freeland’s previously announced deficit and debt reduction targets.

In contrast, tweaking tax rules for working seniors might be a more feasible option for the cash-strapped government. This approach could offer some financial support while encouraging seniors to contribute to the workforce, potentially easing labor shortages.

The final decision on how to support Canada’s seniors remains to be seen. However, the current situation highlights the challenges faced by this growing demographic – balancing rising costs with limited income and the potential to contribute to the workforce.

Sources:

• David Akin, Global News Ottawa (reported the story)
• House of Commons Finance Committee (proposed benefit increases)