PM Justin Trudeau's Canada

[kEiThZ]

I'm not sure that exact stat is OECD tracked.

Here's a page of Child/Family Data you can peruse:

Benefits and wages - Net childcare costs - OECD Data

Find, compare and share OECD data by indicator.

data.oecd.org

On Child Poverty Rates there is this from 2017:

View attachment 555735

This is a more comprehensive look at OECD poverty and child poverty by country - Excel Spread Sheet:

https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.oecd.org/els/soc/CO_2_2_Child_Poverty.xlsx&ved=2ahUKEwjt5MeMtL2FAxWHBTQIHU9sD14QFnoECDIQAQ&usg=AOvVaw1ms5wGjwx-KYef4LUQcqRX

So Canada has higher income replacement for seniors than average while having higher than average child poverty.

Kinda looks to me like the LPC is waging a war on youth, on behalf of the gerontocracy. Reverse Robin Hood.

 

[Northern Light]

So Canada has higher income replacement for seniors than average

No, it does not.

Have another look at the chart.

You're thinking of the 65.5% that I picked as a goal.

If you consolidate CPP/OAS at the enhanced level currently being phased in, you get income replacement in Canada of 47% through the pension system which is much lower than the 61.4% OECD average.

while having higher than average child poverty.

That we do, though we're closer to the average there.

 

[kEiThZ]

I suspect a huge part of the recent immigration surge has been motivated by the realization that we just can't keep funding the gerontocracy like this. It's not just OAS. It's multiple programs. From subsidized housing to medical care to even seniors discounts. Add up the costs across government and they are massive. The only way out, if we don't want to massively increase taxes or make other cuts, is to grow the GDP with more bodies, so that our credit doesn't tank and we can keep borrowing to pay for this.

On Gen Squeeze's recent podcast, Sean Speer (former Harper policy advisor) said that he has given a presentation to the CPC caucus recently that they can't pay for any tax cuts without addressing this issue. So I am curious to see if that advice is taken to heart.

Taxes, deficits, and Canada's fiscal reckoning

Sean Speer joins us to talk about making government budgets more fair for all ages and paying for Baby Boomers' retirements without leaving a legacy of unpaid bills for younger and future generations

gensqueeze.substack.com

 

[kEiThZ]

No, it does not.

Have another look at the chart.

You're thinking of the 65.5% that I picked as a goal.

If you consolidate CPP/OAS at the enhanced level currently being phased in, you get income replacement in Canada of 47% through the pension system which is much lower than the 61.4% OECD average.

My mistake. You're right I mixed up the two. But again, I'll ask, why should we care where we stand relative to the OECD on this?

Seniors are the cohort with the lowest poverty rate in Canada and the highest accumulated wealth. So the argument they need more strikes me as bizarre.

That we do, though we're closer to the average there.

And this is actually terrible. Child poverty is arguably more devastating than senior poverty. We and that child will pay for their unrealized potential for a lifetime.

 

[Northern Light]

My mistake. You're right I mixed up the two. But again, I'll ask, why should we care where we stand relative to the OECD on this?

Seniors are the cohort with the lowest poverty rate in Canada and the highest accumulated wealth.

Again, we can apply a net wealth test for certain benefits; I thought you suggested that.

And this is actually terrible. Child poverty is arguably more devastating than senior poverty. We and that child will pay for their unrealized potential for a lifetime.

I agree. Which is why I ask, why not phase out the National Child Benefit for households in the top 5% of earners and reinvest that in a more generous benefit for those households with less than $50,000 in household income.

That would reduce child poverty.

 

[kEiThZ]

Which is why I ask, why not phase out the National Child Benefit for households in the top 5% of earners and reinvest that in a more generous benefit for those households with less than $50,000 in household income.

That would reduce child poverty.

Personally, I'm fine with that. But after hearing this today, I would not vote for any cuts to family benefits unless there are equal or higher cuts to seniors benefits. I almost felt physically sick hearing and seeing those numbers and knowing how much they have screwed the country. I do feel like this is generational warfare now.

I was planning on staying home next election. If there is one policy that might actually get me to vote CPC, it's generational fairness. I think Gen Squeeze analysis of platforms might decide my vote.

 

[goreckm]

I am curious why we need to provide 65.5% of income in retirement. There should be no obligation on taxpayer to provide more than sustenance. And $80k/yr ain't sustenance. What have these people been doing all their lives with the money that was rolling in? Why isn't there an expectation that they cash out their large homes and use some of the absolutely spectacular capital gains (paid for by young people) to fund their retirement?



100%.

I don't think OAS is necessary at more than 2x the poverty line. This basically amounts to robbery of younger generations.

If I had been more aware of this policy in 2019, I definitely wouldn't have voted red. They created a structural deficit to buy votes and literally screwed the country over for every other priority. All to benefit the richest cohort in the country. And they claim to be progressive. Unbelievable.

Unfortunately this will have the effect of pulling the rug out from the current younger generations. Unlike the boomers, millenials are less likely to own a house. If they buy a house, it's later in life and will have to spend more of their working years paying interest instead of saving. The future is yet to be seen, but I don't forsee similar housing gains for new buyers like for old. They are much less likely to have a pension program, so won't have anything to fall back on when they are no longer able to work. I know families with an income of 200k which are pretty frugal but still living paycheck to paycheck due to the cost of housing/food, they certainly are not saving much for retirement. We should be striving for dignity during retirement. The elimination of these programs will further increase the social upheaval we're seeing now, and that's never a good thing.

 

[kEiThZ]

Unfortunately this will have the effect of pulling the rug out from the current younger generations. Unlike the boomers, millenials are less likely to own a house. If they buy a house, it's later in life and will have to spend more of their working years paying interest instead of saving. The future is yet to be seen, but I don't forsee similar housing gains for new buyers like for old. They are much less likely to have a pension program, so won't have anything to fall back on when they are no longer able to work. I know families with an income of 200k which are pretty frugal but still living paycheck to paycheck due to the cost of housing/food, they certainly are not saving much for retirement. We should be striving for dignity during retirement. The elimination of these programs will further increase the social upheaval we're seeing now, and that's never a good thing.

Arguing to persevere payments today to avoid pain for other generations later doesn't make sense. Millennials and Zoomers have a crap future either way. Either we cut spending on Boomers now to have some fiscal room left for everybody else later. Or we have even harsher cuts later just as Millennials retire. What do you think will happen to OAS if we have a 90s style warning from Wall St about our bonds rolling over? This is exactly why so many young people are suspicious that these programs won't be around when their turn comes.

 

[kEiThZ]

I'll say what nobody is willing to say out loud. Canadians are past caring about the climate when the situation in the country is poor (as they perceive it).

New Ontario polls finds majority think affordability more important than climate action | Globalnews.ca

A new poll found that nearly half of Ontarians polled would scrap the price on carbon price, with a majority saying affordability is more important than climate action.

globalnews.ca

 

[kEiThZ]

Apparently, you will now have to pay your foreign landlord's taxes if they cheat.

Foreign landlord fails to pay taxes, CRA goes after tenant

A Montreal tenant was audited and ordered to pay the tax he had failed to withhold on the monthly rent to his non-resident landlord

www.theglobeandmail.com

Liberals: "But why do young people and the working class hate us so much?"

 

[kEiThZ]

Or tax transfers of generational wealth to fund the OAS. As to rolling back OAS - I have no issue with doing it in principle, but I think the key here is doing it gradually - in monthly increments by age.

AoD

Personally I think (if possible) we need wholesale reform. The current system is pretty ridiculous when you think about it. People who qualify for GIS don't get nearly enough. Meanwhile for somebody with a pension and/or income generating portfolio making more than say $60k/yr, OAS amounts to basically entertainment money. They don't need it to actually live on. Yet the program is insanely expensive and killing the future of the country.

I'd argue that we need to basically kill OAS and turn into a rather generous basic income for seniors with a substantial clawback. Say LICO for the guaranteed income and full phaseout at double the LICO. We could probably apply similar principles for other income supplement programs too (like CCB).

 

[Northern Light]

Personally I think (if possible) we need wholesale reform. The current system is pretty ridiculous when you think about it. People who qualify for GIS don't get nearly enough. Meanwhile for somebody with a pension and/or income generating portfolio making more than say $60k/yr, OAS amounts to basically entertainment money. They don't need it to actually live on. Yet the program is insanely expensive and killing the future of the country.

I'd argue that we need to basically kill OAS and turn into a rather generous basic income for seniors with a substantial clawback. Say LICO for the guaranteed income and full phaseout at double the LICO. We could probably apply similar principles for other income supplement programs too (like CCB).

I decided to look at this further (ie. get more data) to see how we might model things out.

The first thing I did was collect the current OAS payout structure:

From: https://boomerandecho.com/oas-payments-how-much-will-you-receive-from-old-age-security/

Wealth Simple provides a really good explainer of the OAS clawback.

OAS Clawback Explained | Wealthsimple

The government gives you a helping hand when you get old, as long as you don’t make, what it considers, too much money. Here’s exactly how the OAS clawback works.

www.wealthsimple.com

****

I also looked up the OAS deferral program which allows you to push your receiving age back to 70, which is what I advocate being the default option

Where the parliamentary library gave me a number of 40% increased benefit (a few years back) the current number is 36%

So if we pushed the OAS entry age to 70, for everyone, we would increase the payment to $970.14 per month

I'm not sure if I have enough data to play with moving the clawback number, but I'll see if I can't manage it, if I can't, I will see if I can more help from the P.L. again.

****

A couple of items from a recent Globe column by Rob Carrick on the subject of OAS:

OAS consumes 15.5% of Federal Revenues

Here, a comparison of the median income of those affected by the current OAS clawback vs the median income of Seniors as a whole in Canada:

A deep dive on the OAS clawback: How many people are affected, and how much does it cost them?

The number of people paying the OAS recovery tax is rising as Canada’s population ages, but the clawback is an issue strictly for the financially secure

www.theglobeandmail.com

 

[kEiThZ]

Wealth Simple provides a really good explainer of the OAS clawback.

I also looked up the OAS deferral program which allows you to push your receiving age back to 70, which is what I advocate being the default option

Where the parliamentary library gave me a number of 40% increased benefit (a few years back) the current number is 36%

So if we pushed the OAS entry age to 70, for everyone, we would increase the payment to $970.14 per month

In my mind there are two questions here:

1) When do people need to start getting income support?

2) What level of support should that get?

#1 is difficult. I tend to think it's hard to say 60 or 65 or 70. A bricklayer isn't as likely to keep working till 70 as a business analyst. That bricklayer probably has a shorter life expectancy and less savings too. So one could argue they should get it at 60. I'm not sure what a fair threshold is. But there is CPP. So I am guessing our view is that OAS is just to avoid poverty in really old age. So maybe 70 is okay. But I tend to think support will be needed much earlier based on one's health and income.

Which leads to #2. Is the goal of OAS to avoid poverty? If so, why are we paying somebody making $80k full OAS? And why are we providing support that is below LICO? So I would argue support should be at least to LICO and diminish rapidly from there. I think twice LICO is fair to go to zero support. Nobody is living in poverty at that point.

Under this proposal I would get zero dollars. So this wouldn't benefit somebody like me. But I would be happy to see it boost incomes for poorer seniors and of course, save the growing black hole that is OAS in the federal budget, that Gen Squeeze pointed out.

 

[jje1000]

 

[kEiThZ]

OAS consumes 15.5% of Federal Revenues

This doesn't seem like much until you remember we are talking about $400B in revenue and a $450B budget. That's over $60B in spending. It's double the defence budget (a core federal responsibility). It's more than Health Transfers to provinces. It's more than the deficit. And more importantly, it's growing faster than any other line item, including the deficit. It will basically subsume everything else if not brought under control.

I'm not going to say the LPC was wrong to drop OAS qualification age to 65. Some people clearly need it. But the current program is wholly unsustainable and basically turning the federal budget into a transfer scheme to the old and wealthy. Using the taxes of mostly struggling young people to pay off the cohort with the most assets and lowest rate of poverty is fundamentally unfair and indefensible. This has to be reformed.