Parties misdiagnose biggest changes in Fall Economic Statement
Canada needs a federal task force on generational fairness to correct the following misperceptions of federal finances:
NDP claim: FES isn’t even a mini-budget; it’s a “micro-budget”
WRONG: FES 2023 shows that the federal government is adding $115 billion to Old Age Security. No previous government has increased support for retirement income security by this much over a five-year period in decades, if ever.
BQ claim: There is “nothing” in FES 2023 for seniors
WRONG: FES 2023 adds $150 billion in new spending on retirement income supports and medical care for those age 65+. That’s 70% more than all new investment in EI, the CCB, child care, housing, and the clean economy COMBINED.
CPC claim: FES deficits are “inflationary spending” caused by PM Trudeau
WRONG: More than 80% of the $186 billion deficit projected in FES 2023 can be accounted for by new spending on Old Age Security and medical care for those age 65+. The Prime Minister is not responsible for the fact that previous governments failed for decades to plan adequately for how to pay for the full cost of retirement income and medical care for retirees.
When boomers came of age as young adults, there were seven working-age residents for every retiree. Now in retirement, boomers expect the same or better supports when there are just three workers to pay for every person over age 65. This means past governments needed to collect enough taxes from boomers during their working years to create a pool of unspent government money on which they could draw to finance boomer retirement supports. Unfortunately, past governments found it politically inconvenient to ask boomers to build this surplus. So current governments, federally and provincially, now inherit the problem. Deficits are the predictable outcome.
Liberal claim: The forward to the FES features investments in a clean economy, child care, the Canada Child Benefit, the Canada Workers Benefits, CPP and housing
WRONG: The biggest spending increases in the FES are for Old Age Security. By not drawing attention to past governments’ failure to work out how to plan and pay for a healthy retirement for boomers, the Liberals make themselves culpable.