Opinion: Canadians should understand the costs of expanding Old Age Security

financialpost.com:

By Jake Fuss and Grady Munro

In yet another high-stakes maneuver in the current session of Parliament, the Bloc Québécois recently tabled a motion urging the Trudeau government to support Bill C-319, which would increase Old Age Security (OAS) payments for seniors aged 65 to 74 by 10 per cent. The bill, which passed the House of Commons (though with only five Liberal votes in favour), proposes to spend money so it still requires a “royal recommendation” from the government. And the Bloc is threatening to trigger an election if the government doesn’t sign on by Oct. 29.

According to a new poll, 79 per cent of Canadians “support or somewhat support” the OAS increase. But the poll provided no information to respondents about the costs of expanding OAS, even though Canadians should understand the costs before they pledge support for any government program.

Benefits without costs are often popular. According to past polling, more than two-thirds of Canadians expressed support for the Trudeau government’s three new social programs: national dental care, $10-a-day daycare and pharmacare. Yet once respondents were made aware of potential tax increases (specifically, increases to the GST) to finance these programs, support plummeted to less than 50 per cent for all three.

Clearly, support for government programs can change dramatically once Canadians understand how much they’re going to have to pay for them. So, that being said, what are the costs of a 10 per cent increase in OAS payments for seniors aged 65 to 74? According to Parliamentary Budget Officer Yves Giroux, more than $3 billion a year, with a five-year price tag of $16.1 billion, which is in his words a “significant chunk of change.”

Based on its latest budget, the