Ballooning seniors' benefits are another example of Canada's east-west divide

OTTAWA — Advocates are warning that Ottawa’s growing spending on older Canadians could widen regional tensions, ahead of an expected fall independence referendum in Alberta.

Jack Mintz, an economist at the University of Calgary, says that the federal government’s $80 billion Old Age Security (OAS) program will be an easy target for Alberta separatists making the case that the province is overtaxed and underserved by Ottawa.

“If I were an Alberta separatist, I’d point to (OAS) and say, aha, see, once again they want to raid Alberta,” said Mintz.

Alberta and the other Prairie provinces have young median ages, relative to the other provinces, and as such receive a lower share of OAS payments.

Alberta’s median age was 38.1 in 2023, compared to 40 in Ontario, 42.6 in Quebec, and almost 45 across Atlantic Canada

Mintz says that Alberta’s higher average salaries mean that seniors in Alberta see the benefits they do get taxed at a higher rate.

“This is a benefit that’s targeted and phased out for higher-income people. So, again, Alberta gets hit more,” said Mintz.

Mintz was one of several economists who called in the 2010s for Ottawa to raise the qualifying age for OAS from 65 to 67. The Harper government adopted a plan to gradually do this in 2012, but this was reversed shortly after the Liberals took power in late 2015.

In 2022, the Trudeau government boosted OAS payments by 10 per cent to those over 75. The Bloc Québécois has subsequently pushed to extend the increase to all seniors.

A Bloc bill recommending the full increase passed through the House of Commons in late 2024, with the support of all four opposition parties , stalling when an election was called last year.

Bloc MP Xavier Barsalou-Duval said Monday that his party’s plan to increase to OAS hasn’t changed.

“We have been for a long time advocating for a rise of (OAS) because we know that the indexation they have has nothing to do with inflation, and it’s a regular complaint that we have all the time,” said Barsalou-Duval during an unrelated press briefing in Ottawa.

The Bloc proposal would tack on an estimated $16 billion over five years to the cost of OAS, which is already expected to grow to more than $100 billion annually by 2030.

Paul Kershaw, head of generational fairness group Generation Squeeze, said at a separate press conference on Monday that OAS needs to be fixed irrespective of Alberta’s future in Canada.

“This moment of sending (billions of dollars) to retirees who have relative financial security compared to many, including many younger Canadians in Alberta is something that needs attention,” said Kershaw.

Kershaw said he agreed that OAS, in its current form, could be put forward as an exemplar of “the concerns in Alberta about dollars going in inefficient ways to Ottawa.”

A recent study by the Fraser Institute estimated that Alberta contributes roughly $14.2 billion more to Ottawa annually than it gets back in federal spending.

Recent polling shows that support for Alberta independence is highest among men in their prime working years . Three in 10 men between the ages of 35 and 49 say that Alberta should leave Canada and become its own country, more than any other demographic.

Almost half of Albertans who make more than $150,000 annually but say they have trouble paying their monthly bills support separation.

National Postrmohamed@postmedia.com

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