Canada says Old Age Security plan unsustainable
OTTAWA (Reuters) - Canada's Old Age Security pension program is unsustainable and needs to be changed, the Conservative government said on Monday, drawing opposition accusations that it was breaking a campaign promise not to cut seniors' benefits.
Prime Minister Stephen Harper said in a speech last Thursday that the country needs to limit the growth of spending on the retirement income system as life expectancy increases. He promised not to hurt current recipients.
Expanding on Harper's comments, Human Resources Minister Diane Finley said in Parliament on Monday that the Old Age Security program, a pillar of the pension system funded out of general government revenues, needs changing.
"The Old Age Security system is not sustainable now. We are going to make it that for generations in the future," she said.
Old Age Security payments go to all Canadian seniors, whether they were employees or not, to provide the basic necessities of life. The tax system claws some of the money back from higher-income seniors.
Finley said a separate government pension plan, the Canada Pension Plan, which is funded by employers and workers, is actuarially sound.
In tackling programs for seniors, the Conservatives are venturing onto sensitive political ground as seniors tend to vote in great numbers. But the government insisted it is acting responsibly.
Liberal leader Bob Rae said Harper had pledged during the 2011 election campaign not to touch transfers to seniors.
"Is the prime minister committed to sustaining seniors? Or is he committed to breaking his election promises and breaking faith with the people of Canada?" Rae demanded. Continued...