2020: FLAHERTY’S LIKELY DATE FOR PENSION REFORM

Development comes as political storm continues in House over plans to increase eligibility age

OTTAWA — Finance Minister Jim Flaherty has promised that Canadians 57 and older won’t be harmed by planned cuts to the public pension system, revealing the change won’t happen before 2020.

Moreover, he indicated Friday the reforms might not occur until 2025, which would mean Canadians as young as 52 would also be untouched by the changes.

The development occurred Friday, as the political storm over pensions continued to swirl in the House of Commons and Flaherty was hundreds of kilometres away at an unrelated announcement for a port authority in Oshawa, Ont.

At a news conference, Flaherty was asked if the government plans to introduce measures in his forthcoming budget

This is for 2020, 2025 so that people who are middle age and younger today ... can be assured that they will have these social programs ...

JIM FLAHERTY

MINISTER OF FINANCE

to rein in the future costs of the Old Age Security [ OAS] system.

“The timing of what we do will involve more than one budget,” said Flaherty, who is expected to unveil his much- anticipated fiscal blueprint in March.

“We will announce some steps forward, but we certainly need to plan ahead and this is not for tomorrow morning. This is for 2020, 2025 so that people who are middle age and younger today ... can be assured that they will have these social programs properly funded, fiscally responsible, that they’ll be there for them in the future.”

The issue was catapulted to the top of the country’s political agenda when Prime Minister Stephen Harper announced in a recent speech in Davos, Switzerland, that the future costs of the pension system would be scaled back to keep it affordable.

Since then, the government has offered few details, beyond Harper confirming in an interview with Postmedia News that the government is considering increasing the eligibility age for OAS which provides benefits for people once they turn 65.

Both he and Harper have repeatedly pledged that the cutbacks won’t affect today’s seniors or those approaching retirement — but it wasn’t until Friday that some detail was provided about when the cuts will begin to phased in.

It is widely believed that the age for OAS eligibility will be gradually increased to 67. This would accomplish two of the Conservative government’s goals: keep more people in the declining workforce and reduce the cost of the OAS system itself because there would be fewer beneficiaries.

Opposition parties say Harper has created a “manufactured crisis” about the future sustainability of pensions. The government says the cost of the OAS, without reforms, will soar to $ 108 billion in 2030 from $ 36.5 billion in 2010.

But critics say that, in fact, when viewed as a ratio of Canada’s GDP, the increase in pension costs won’t be so stark. Adding to the debate was a report this week by parliamentary budget officer Kevin Page, who said the OAS system is fiscally sustainable in the long term.

Critics complain that Harper specifically promised in the 2006 election that first brought him to power that he would not touch seniors’ pensions. They add that he did not raise the issue in last year’s election and insist that he does not have a mandate on pension reform — particularly by making changes that wouldn’t take effect until so far into the future.

In the Commons Friday, NDP MP Philip Toone reminded the Tories that when they were in opposition they accused the Liberal government of having a secret plan to raise the age of OAS eligibility.

“They have become everything they used to oppose,” said Toone, focusing his fire on Government House Leader Peter Van Loan.