Canada can help people of all ages to thrive, while growing the resilience and economic security we need to withstand current threats, by following our evidence-based policy prescription

That's what we told Ottawa in our submission to the 2025 federal budget. We hope they'll follow our advice to build a Canada that works for all generations.

Interested in echoing these recommendations? You have until March 10 to let Ottawa know what YOU want to see in the next federal budget. Find our more here: 2025 Pre-Budget Consultations

1. Fix retirement benefits to eliminate poverty for seniors and help younger generations

Canada’s Old Age Security (OAS) program desperately needs an overhaul. It hasn’t been reviewed since its creation 1952, even though it now accounts for about 1/5 of the federal budget. The Auditor General recently raised the alarm about this lack of transparency and accountability. Polling confirms that the way we determine eligibility for OAS cash benefits is out of step with what most Canadians think about who needs taxpayer-funded support.

The answer is to modernize OAS eligibility to reduce payments to affluent retirees with annual incomes over $100k. This change would ask 1 in 4 retirees to get about $3,200 less in after-tax income. Three quarters of Canadians approve – including seniors. Even Canada’s main seniors’ lobby (the Canadian Association of Retired Persons) is on the record saying that it’s time for a rethink of OAS thresholds. 

The savings from this single reform would total about $36 billion over five years. With these funds, we could achieve big things for Canadians of all ages – all without additional taxes:

• Lift all seniors out of poverty – just under a half-million people. Price tag: $12 billion
• Deliver extra financial support to low-income seniors. Price tag: $4 billion
• Double proposed spending increased for affordable housing. Price tag: $6 billion
• Double proposed spending increased on postsecondary education. Price tag: $5 billion
• Add 50% to investments in affordable child care. Price tag: $5 billion
• Start paying down the deficit. Price tag: $4 billion

That’s a win-win-win plan we can all get behind, especially at a time when Canada needs to have its fiscal house in order to respond to US tariffs and other threats.

2. Shore up the funds we need to support our aging population by eliminating outdated tax shelters

OAS spending is rising rapidly as the large baby boom cohort retires. To make sure we can keep (a reformed version of) this program afloat and protect retirees’ financial security, we need to consider all available policy levers. One obvious step is to eliminate two questionable tax shelters for retirees that cost over $6 billion a year, even though the design of these tax measures generally fails to benefit the lowest-income seniors. 

At $5-billion annually, the Age Credit costs as much as Ottawa invested in $10-a-day child care in 2024. It shelters $8k of income from taxation for people over 64, delivering a maximum benefit of $1,200 for retirees with incomes below $40k. The tax shelter only phases out entirely for retirees with incomes above $92k – about $25k more than Canada’s median income. It’s arbitrary to maintain an age-based tax shelter for those over 64 when this demographic has the most wealth and least poverty of any age group in Canada. Especially when Statistics Canada reports that many younger people now forgo having children because of the large gap between housing costs and earnings from full-time work.

Similarly, the Pension Income Credit costs Ottawa $1.4-billion annually. It enables any retiree to shelter $2k in pension income from taxation. This credit effectively privileges pension income over earnings from paid work, even though minimum-wage and other low-wage workers are more likely to experience poverty and housing insecurity than retirees.

 3. Compensate young people for sacrificing their financial security to protect the housing wealth that older homeowners gained from rising home prices

Canada could choose to make housing more affordable by organizing policies around the goal of having home prices fall. Lower prices would mean those locked out of ownership have a better shot at entering the market, and those enduring high rents would see payments more in line with their earnings.

Despite these benefits, the goal of falling home prices seldom makes it to political tables. Politicians vying for votes prioritize protecting the wealth older homeowners have gained from rising home prices, over restoring what young people have lost – the dream of secure housing within reach of their earnings. In short, the political bargain we’ve struck in Canada asks young people to sacrifice their financial wellbeing to protect their parents and grandparents ‘nest eggs’.

The 2025 budget must explore how to compensate young people for their profound act of intergenerational solidarity. We can begin by targeting some savings from fixing Old Age Security to reducing housing, child care, education and other costs.

4. Stand up for pollution pricing so we don’t leave big messes for our kids to clean up

If you make a mess, clean it up. That’s a family value we teach our kids, and we should live by the same wisdom when it comes to pollution. That’s why Budget 2025 budget must continue to stand up Canada’s pollution price.

Political leaders may try to convince us that paying for our pollution isn’t urgent; that we needn’t worry about the betrayal, abandonment and anxiety our kids report feeling thanks to the slow pace of our response to climate risks they will inherit. But the reality is that we don’t really have a choice between paying or not paying for our pollution – our only choice is between paying less now, or leaving younger and future generations to pay more later.

New polling confirms that most Canadians (73%) agree that politicians betray our kids when they expect them to pay dearly for the pollution they are unwilling to pay for today. Two-thirds agree that paying for our pollution matters, because there is no better planet to protect for our kids – but there are better ways to make life more affordable than ‘axing the tax’ on carbon pollution, like better investments in housing, child care, postsecondary and retirement.

5. Double down on $10-a-day child care to grow our economy and support families

In 2021, Canada embarked on the biggest social policy innovation in decades: a national $10-a-day child care system. Just a few years into the roll out, its positive impacts are clear. In addition to expanding access and reducing fees for many families, this program has created 50,000 new jobs and contributed $32-billion to Canada’s economy. We should all thank $10-a-day for keeping us out of a recession.

The 2025 budget should stand firmly behind this successful program, and invest what’s needed to make sure faster implementation is a top priority – especially in provinces that are dragging their feet, and slowing down families’ access to the affordable and high-quality care they need.

6. Make future budgets and governments more accountable by measuring what matters

We all have a stake in making sure that we get the best bang for our taxpayer bucks, but there are big gaps in measuring what matters for investing in wellbeing from the early years onwards. Filling them means adopting four new evidence-based metrics in Budget 2025:

• The ratio of spending on social supports relative to spending on medical care, because the social conditions where we are born, grow and age matter more for our health than medical care.
• The distribution of government spending by age, so we know if we’re getting it right for all generations, and adapting quickly enough to changing social and economic needs.
• A new inflation measure that fixes the way home price increases are accounted for, so that the data no longer send the wrong policy signals to economic decision makers.
• Strengthened accountability for meeting climate targets via an expanded mandate and authorities for Canada’s Net-Zero Advisory Body.

7. Enshrine these policy commitments in legislation

Canada needs legislation to safeguard the wellbeing of younger and future generations. This legislation would shape national policies that protect a healthy childhood, home, planet by:

• Ensuring governments consider the wellbeing of all generations in budget decisions (supported by the above metrics)
• Establishing a minister, commissioner, and advisory body to work as tugboats that keep the freighter of government activity on track for generational fairness

Together, these recommendations will go a long way towards restoring responsible stewardship of our national finances.

Growing deficits have become a fixture of federal budgets, largely thanks to our failure to adequately prepare for population aging. Deficits leave a legacy of unpaid bills to younger and future generations of Canadians – and they compromise the solid economic foundation we need to be resilient in the face of global instability and emerging economic risks. Budget 2025 can grapple with the structural causes of current deficits in generationally fair ways by following our evidence-based policy prescriptions.