In his 2012 budget speech March 29, Finance Minister Jim Flaherty asserted action was necessary to ensure the Old Age Security program remained sustainable. In 20 years, he said, there would be only two workers for every one retiree pulling down OAS benefits.
The implication is that the viability of this important public pension scheme is threatened by the influx of retiring baby boomers expected over the next few decades.
But this flies in the face of opinion by reputable pension experts, as well as the findings of the parliamentary budget officer, who maintains the program is on sound financial footing and doesn't need to be tinkered with.
So, the question is: Why is the government insisting otherwise?
One possible answer can be found in Flaherty's budget speech when he refers to the OAS as "the largest spending program of the federal government." By promising to eventually reduce this expenditure, is the Harper government signalling to the world, in particular the corporate world, that it is committed to reducing socialservice spending? And is it reinforcing this message by launching an immediate attack on public service employee pension plans?
The Harper government knows the logic of its case is weak, so it is going to great lengths to get ordinary Canadians on side. Basically, it's using a carrot and stick strategy. On the one hand, they try to frighten the next generation by suggesting the OAS might not be there for them, while at the same time reassuring baby boomers they have nothing to worry about. In actual fact, as long as our taxes are used wisely, the OAS is going to be there for all of us.
Working people pay taxes in exchange for social programs. For the most part, the more they earn, the more taxes they pay.
So, lasting and decent paying jobs are essential to a sound tax base. For as long as I can remember, our governments have given business and industry tax breaks and give-backs and write-offs and a whole range of monetary inducements to reinvest in our economy and, ergo, create jobs.
However, there is evidence that many of the jobs offered these days are mostly short-term or low wage. Jobs that come with the promise of a full-time tax-paying career are scarce.
One reason is that Canada processes less and less of its raw materials and, instead, ships them to other countries for manufacture. In effect, with the active assistance of the federal and provincial governments, resource-based industries are exporting long-term good paying jobs along with our natural resources.
The impact of failed job creation on our tax base is obvious. Less taxes paid by a stagnant or impermanent workforce ultimately means less money to maintain social services.
So why does government continue to financially support corporate Canada if it is not doing a satisfactory job of creating jobs? If we're not getting a good return on our investment, why don't we redirect it to other programs?
For example, I dare say that the hundreds of millions of dollars at stake each year would produce a more positive outcome if provided to social services such as health and education and, oh yeah, old age security.
Bill Brassington, Burnaby