old age security
And three out of four don't have a financial plan, polling suggests.
The Liberal Government has stated they want to build a strong middle class, but who comprises the middle class? Mr. Morneau in his 2017 budget speech stated, "All Canadians must pay their fair share of taxes," but what is a "fair share"? Let's do the math and find out.
We've seen this story before in the mid-1990s, when out-of-control deficits and an impending sovereign debt crisis led to painful spending cuts and tax increases. The government is wrong to make the return to budget balance conditional on strong economic growth. Population aging is already taking its toll on long-term projections, and too many unforeseen events can derail the fiscal path. Only tight fiscal discipline can balance the budget within a reasonable timeframe, protecting Canadians' standards of living from future large tax increases and cuts to government services.
He's essentially showering grandma with money and sending her grandkids the bill.
There are 719,000 seniors living in poverty in Canada, study says.
There are many more election promises that will improve the quality of life for all Canadians as we age -- this election has been an embarrassment of riches in that sense. Many, like pharmacare or restarting the Health Accords, will take some time to work out so it's important to start the consultation and planning process right away.
Nine-million baby boomers will retire from the workforce over the next two decades, and when they do, they will start to consume the most expensive forms of government programs. This is great news for seniors, but terrible news for our public finances and for young Canadians forced to foot the bill. Generation Y has been dubbed the "Millennial" generation because we came of age at the turn of the new millennium. A more fitting name for this cohort is Generation Screwed.
Ontario's recent budget included the Liberals' proposal for a mandatory government pension plan modelled after the Canada Pension Plan. The proposal, however, is largely based on the faulty assumption that most Canadians are not adequately prepared for retirement.
Put simply, the aging of Canada's population has resulted in large and growing unfunded liabilities. The funding shortfall is estimated at $792.3 billion for the CPP, $494.4 billion for OAS, and $894.7 billion for medicare. Together the unfunded liabilities in Canada's public pensions and health care programs total $2.2 trillion or $134,841 for each income taxpayer. These unfunded program obligations make up more than half of total government liabilities. And their sheer size calls into question the structure of taxing current workers to provide benefits for retirees. Ultimately, to maintain current levels of spending in the future, taxes will have to increase or benefits for other programs will have to be cut -- or both.
With the holiday season now behind us, the oncoming flood of credit statements to Canadian households is a powerful reminder that there are no free lunches. Borrowing to pay for current consumption brings interest payments, and ultimately, the need to pay off principal balances. But this same reality also applies to governments.