That's because people can't do basic math.
The government counts on that:
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 Trudeau government expects to run deficits of at least $20 billion for the next five years and rack up more than $400 billion in new debt by fiscal year 2028-29. If it borrows more money to pay for increased OAS benefits, those deficit and debt numbers will grow even larger.
And again: Canadians will ultimately bear the costs of an expanded OAS through higher future taxes because of increased interest on the government’s debt. This fiscal year (2024-25) federal interest costs are expected to reach $54.1 billion — which is equal to all the money the GST raises. These are taxpayer dollars that won’t go towards any services or programs for Canadians. And interest costs will continue to grow as the government adds more and more debt.
In addition to being costly, the Bloc plan is poorly targeted. While some programs — most notably, the Guaranteed Income Supplement (GIS) — provide additional income support to low-income seniors, OAS also goes to many upper middle-income seniors. Based on current thresholds, individual seniors earning up to $148,451 per year are eligible to receive it (though seniors earning more than $90,997 of income don’t receive the full amount). If Bill C-319 becomes law, a senior couple with a combined household income of nearly $300,000 will receive an increase in OAS payments.
**
Blacklock's Reporter says the Department of Social Development report, dated April 29, estimates that increasing OAS benefits by 10% for pensioners aged 65 to 74 — the key provision of the Bloc bill — would add $19.76 billion to federal spending over the first six years. This increase mirrors a 2022 decision by the government to raise benefits for those over 75.
“In total, Bill C-319 amendments would increase Old Age Security program costs by $19.76 billion over the first six years,” said the report. “These costs would increase significantly over time with aging demographics.”
Currently, 7.1 million Canadians receive OAS benefits, which cost $69.4 billion in 2023. The bill is expected to directly affect 4.1 million pensioners aged 65 to 74, with the first year of implementation costing $3.24 billion.
Bloc leader Yves-François Blanchet has issued a clear warning to the government: “If the government does not accede to our terms, we will embark on negotiations... with the end purpose being clear,” he told the Commons on October 2, signaling a potential coalition with other opposition parties to bring down the government if the bill isn't passed.
Bill C-319, which was introduced in 2023, is awaiting its third reading in the House of Commons before heading to the Senate. Blanchet’s ultimatum to pass it by Halloween raises the stakes for Prime Minister Justin Trudeau's minority government.
The Briefing Binder also highlights the financial struggles many seniors face, noting that poverty rates among seniors have doubled since the pandemic. The poverty rate, which had dropped to 3.1% in 2020, rebounded to 6% by 2022, leaving 36,000 more seniors living in poverty than in 2015. Additionally, 11.7% of seniors experienced food insecurity last year, further underscoring the importance of boosting benefits.
The Competition Bureau concluded that Canada’s grocery industry is highly concentrated and needs more competition. It recommended that it be granted more funding and “more power to act,” particularly if it is to maintain “heightened vigilance and scrutiny” in the grocery sector.
A final factor contributing to food inflation — overlooked by both the Commons committee and the Competition Bureau — is the role of the Bank of Canada in drastically expanding the money supply.
The economic principle is simple: When the amount of money in an economy is increased, and there are more dollars chasing the same quantity of goods and services, price levels must rise. ...
The causes and culprits of food inflation are thus clearly explained by well-known economic principles and government decisions: supply chain disruptions, trade tariffs and expansionary monetary policy. There was no sudden increase of greed among grocers, nor any sudden decrease in competitive forces to keep that greed in check.
Perhaps these causes are not as provocative an explanation as greedflation, but they do a much better job of fitting both the observed facts and the scientific theory.
Also:
Grow your own fruit and veg – and destroy the planet. Allotment produce, much prized by proud food-growing citizens the world over, has six times the ‘carbon’ footprint of conventional agriculture, according to a recent paper published by Nature. “Steps must be taken to ensure that urban agriculture supports, and does not undermine, urban decarbonisation efforts,” demand the authors. What have these people been smoking? Surely not some of the puff circulating at the recent Psychedelic Climate Week in New York. Highlights included a discussion on funding ketamine-assisted therapy and a panel on ‘Balancing Investing and Impact with Climate and Psychedelic Capital’.
If the median Canadian family spent and borrowed like the federal government, they would already be $427,759 in debt, and continuing to borrow. This is not a hypothetical scenario, but a stark reality that should urgently raise serious concerns about our financial future.
The $39.8 billion deficit expected by Ottawa in 2024-2025 represents consecutive annual federal deficits since 2015. These continued deficits are not just numbers on a balance sheet, but a clear indication of the higher taxes that Canadians will inevitably face. The Trudeau Liberal administration has never balanced a budget, and the consequences are becoming increasingly clear. ...
Continuous annual borrowing by Ottawa to finance increased spending has driven federal total debt from 53% of the economy in 2014-15, up to an expected 69.8% in 2024-25. This significant increase in the level of federal debt is not just a number. It comes with a hurtful cost and will result in higher taxes on Canadians. The required interest payments that borrowing brings will start to crowd out the money needed to sustain our valued social programs, a future that is becoming increasingly uncertain.
I'm sure this will right itself with more money.
No comments:
Post a Comment