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Canadians should understand costs of expanding Old Age Security

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4 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

In yet another high-stakes maneuver in the fall 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 motion passed and the Bloc is threatening to trigger an election if the Trudeau government doesn’t give the bill final approval before October 29.

Meanwhile, according to a new poll, 79 per cent of Canadians “support or somewhat support” the OAS increase. But crucially, the poll provided no information to respondents about the costs associated with expanding OAS, even though Canadians should understand the costs before they pledge support for any government program.

Consider this—according to past polling, more than two-thirds of Canadians expressed support for the Trudeau government’s national dental care, $10-a-day daycare, and pharmacare programs. Yet once respondents were made aware of potential tax increases (specifically, increases to the GST), support plummeted to less than 50 per cent for all three programs.

Clearly, support for government programs can change dramatically once Canadians understand the costs since they ultimately must pay those costs. 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 the Parliamentary Budget Officer Yves Giroux, the policy would cost more than $3 billion a year, with a five-year price tag of $16.1 billion—a “significant chunk of change” in his words.

Based on its latest budget, the Trudeau government expects to run deficits of at least $20.0 billion for the next five years and rack up more than $400 billion in new debt by 2028/29. If the government borrows more money to pay for increased OAS benefits, that debt number will grow even larger.

And again, Canadians will ultimately bear the costs of an expanded OAS through higher taxes in the future because Canadians must pay interest on government debt. This fiscal year (2024/25) federal debt interest costs are already expected to reach $54.1 billion—which is equal to the entire amount raised by the GST. 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.

Finally, in addition to being costly, the plan is poorly targeted. While some programs such as the Guaranteed Income Supplement (GIS) provide additional income support to low-income seniors, OAS provides support to many upper middle-income seniors. Indeed, based on current thresholds, individual seniors (aged 65 to 74) earning up to $148,451 per year are eligible to receive OAS (though seniors earning more than $90,997 of income don’t receive the full amount). Therefore, if Bill C-319 becomes law, a senior couple with a combined household income of nearly $300,000 will receive an increase in their OAS payments.

Increasing OAS payments will cost billions each year while supplementing the income of many seniors who aren’t in need. Despite the political theatre in Ottawa, Canadians are ultimately the ones who will foot the bill.

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Alberta

Pierre Poilievre – Per Capita, Hardisty, Alberta Is the Most Important Little Town In Canada

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From Pierre Poilievre

The tiny town of Hardisty, Alberta (623 people) moves $90 billion in energy a year—that’s more than the GDP of some countries.

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Business

Why it’s time to repeal the oil tanker ban on B.C.’s north coast

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The Port of Prince Rupert on the north coast of British Columbia. Photo courtesy Prince Rupert Port Authority

From the Canadian Energy Centre

By Will Gibson

Moratorium does little to improve marine safety while sending the wrong message to energy investors

In 2019, Martha Hall Findlay, then-CEO of the Canada West Foundation, penned a strongly worded op-ed in the Globe and Mail calling the federal ban of oil tankers on B.C.’s northern coast “un-Canadian.”

Six years later, her opinion hasn’t changed.

“It was bad legislation and the government should get rid of it,” said Hall Findlay, now director of the University of Calgary’s School of Public Policy.

The moratorium, known as Bill C-48, banned vessels carrying more than 12,500 tonnes of oil from accessing northern B.C. ports.

Targeting products from one sector in one area does little to achieve the goal of overall improved marine transport safety, she said.

“There are risks associated with any kind of transportation with any goods, and not all of them are with oil tankers. All that singling out one part of one coast did was prevent more oil and gas from being produced that could be shipped off that coast,” she said.

Hall Findlay is a former Liberal MP who served as Suncor Energy’s chief sustainability officer before taking on her role at the University of Calgary.

She sees an opportunity to remove the tanker moratorium in light of changing attitudes about resource development across Canada and a new federal government that has publicly committed to delivering nation-building energy projects.

“There’s a greater recognition in large portions of the public across the country, not just Alberta and Saskatchewan, that Canada is too dependent on the United States as the only customer for our energy products,” she said.

“There are better alternatives to C-48, such as setting aside what are called Particularly Sensitive Sea Areas, which have been established in areas such as the Great Barrier Reef and the Galapagos Islands.”

The Business Council of British Columbia, which represents more than 200 companies, post-secondary institutions and industry associations, echoes Hall Findlay’s call for the tanker ban to be repealed.

“Comparable shipments face no such restrictions on the East Coast,” said Denise Mullen, the council’s director of environment, sustainability and Indigenous relations.

“This unfair treatment reinforces Canada’s over-reliance on the U.S. market, where Canadian oil is sold at a discount, by restricting access to Asia-Pacific markets.

“This results in billions in lost government revenues and reduced private investment at a time when our economy can least afford it.”

The ban on tanker traffic specifically in northern B.C. doesn’t make sense given Canada already has strong marine safety regulations in place, Mullen said.

Notably, completion of the Trans Mountain Pipeline expansion in 2024 also doubled marine spill response capacity on Canada’s West Coast. A $170 million investment added new equipment, personnel and response bases in the Salish Sea.

“The [C-48] moratorium adds little real protection while sending a damaging message to global investors,” she said.

“This undermines the confidence needed for long-term investment in critical trade-enabling infrastructure.”

Indigenous Resource Network executive director John Desjarlais senses there’s an openness to revisiting the issue for Indigenous communities.

“Sentiment has changed and evolved in the past six years,” he said.

“There are still concerns and trust that needs to be built. But there’s also a recognition that in addition to environmental impacts, [there are] consequences of not doing it in terms of an economic impact as well as the cascading socio-economic impacts.”

The ban effectively killed the proposed $16-billion Eagle Spirit project, an Indigenous-led pipeline that would have shipped oil from northern Alberta to a tidewater export terminal at Prince Rupert, B.C.

“When you have Indigenous participants who want to advance these projects, the moratorium needs to be revisited,” Desjarlais said.

He notes that in the six years since the tanker ban went into effect, there are growing partnerships between B.C. First Nations and the energy industry, including the Haisla Nation’s Cedar LNG project and the Nisga’a Nation’s Ksi Lisims LNG project.

This has deepened the trust that projects can mitigate risks while providing economic reconciliation and benefits to communities, Dejarlais said.

“Industry has come leaps and bounds in terms of working with First Nations,” he said.

“They are treating the rights of the communities they work with appropriately in terms of project risk and returns.”

Hall Findlay is cautiously optimistic that the tanker ban will be replaced by more appropriate legislation.

“I’m hoping that we see the revival of a federal government that brings pragmatism to governing the country,” she said.

“Repealing C-48 would be a sign of that happening.”

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