Seniors’ index pledge could prove costly

The Trudeau government should tread carefully on a Liberal promise to find a new way of making sure elderly benefits keep pace with rising costs, newly released documents suggest.

The idea of a so-called “seniors’ price index” arises from a 2005 Statistics Canada study that showed the cost of goods purchased by older Canadians growing faster than the rate of inflation as captured by the traditional consumer price index.

Currently, increases in seniors’ benefits like old age security are tied to the consumer price index so the benefit doesn’t lose value over time.

In the intervening years, however, the government has spent $45 million to improve the accuracy of the index, including using a larger sample of goods and prices to account for local populations.

Those changes mean the “conclusions of the study with respect to inflation for seniors-only households relative to all households may no longer be valid,” according to a July briefing note to Social Development Minister Jean-Yves Duclos.

The Canadian Press obtained a copy of the note under the Access to Information Act.

Mathieu Filion, a spokesman for Duclos, said talks are ongoing with Statistics Canada about the proposed measurement for seniors, with more analysis needed to see if the 12-year old study still holds true.

“What matters for this government is to protect the standard of living of senior Canadians. Our seniors deserve a quiet retirement, protected from pressures of the increasing cost of living,” Filion said.

The Liberals first made the promise of a new index during the 2015 election campaign.