[Jonny5]

And a lot of Canadian debt is held by Canadian pension plans (though not so much the CPP) which pay the interest back through Canadian's retirement accounts where it is ultimately taxed and earns back revenue for the government.

 

[afransen]

I will say, the yellow line in the chart is the one I'm more comfortable using as a baseline, as the idea that we're fiscally sound because we can raid the CPP nest egg doesn't really work for me.

Those funds are segregated and should remain such, so net debt, in my estimation should not include CPP/QPP as a liquid financial asset.

In that context, I think net debt remains too high.

Let's keep in mind that in fiscal 2024-2025 the estimated cost of interest payments on the federal debt is a whopping 54.1B that was larger than projected federal deficit in last year's budget..........

Alternatively, that's enough to cover the full cost of Universal Pharmacare, Universal Dentalcare, and you would still have 20B leftover, per year.

I'm not opposed to prudent borrowing, but I think we've done a lot of imprudent borrowing over the years and could use to trim that number.

I was looking more at the green line. Still, the debt situation is not, on the whole, all that bad. We would be in much better shape had we handled covid more responsibly.

 

[UtakataNoAnnex]

Indeed. Lower is better. That chart is made by a labour union, so you should recognize their bias. They show net debt, which is not the total level of debt but gross debt less assets held by the government.

…opposed to the bias that keeps getting propagated by the usual neoliberal suspects? I think the question should always be who gets to benefit from the fear of that well funded “deficit is out of control” narrative.

But that’s not really the point of my line of questioning…rather the chart is indeed suggesting that we seem to be in pretty good shape. If that chart and subsequent article does not show an accurate picture, then please post one that both the business minded and labour interests can agree upon. Because it gets a bit too he said/she said dynamic that’s not being too helpful here, IMO.

 

[afransen]

…opposed to the bias that keeps getting propagated by the usual neoliberal suspects? I think the question should always be who gets to benefit from the fear of that well funded “deficit is out of control” narrative.

But that’s not really the point of my line of questioning…rather the chart is indeed suggesting that we seem to be in pretty good shape. If that chart and subsequent article does not show an accurate picture, then please post one that both the business minded and labour interests can agree upon. Because it gets a bit too he said/she said dynamic that’s not being too helpful here, IMO.

I think the one area for concern is that we didn't make good use of the 'demographic' dividend that countries get when they transition from high birth rate to low birth rate. Canada is moving into an era with a much higher dependency ratio with retirees and that will strain finances.

 

[UtakataNoAnnex]

I think the one area for concern is that we didn't make good use of the 'demographic' dividend that countries get when they transition from high birth rate to low birth rate. Canada is moving into an era with a much higher dependency ratio with retirees and that will strain finances.

Fair point. But one we need to be careful of what we say here, as I know I am screaming to that category at a seemingly break neck pace. >.<

 

[Northern Light]

I think the one area for concern is that we didn't make good use of the 'demographic' dividend that countries get when they transition from high birth rate to low birth rate. Canada is moving into an era with a much higher dependency ratio with retirees and that will strain finances.

I feel very strongly that we need to bump up the retirement age for just this reason.

When we adopted 65 as the retirement age, most people were dying at age 71, or retired for 6 years after working for more than 45.

Increased uptake of post-secondary education (and High School graduation more broadly) has workers entering the work force later on average, by several years. Meanwhile the life expectancy is closer to 81 than 71.....meaning
a pension is expected to sustain you for 16 years or so.

If we bumped the retirement age to 70 (we could provide carve-outs for physically demanding jobs where this is not possible) We could be raising CPP/OAS paying outs by 42% with no change to premiums, or we would use a portion of that dividend to reduce personal/employer contributions.

We would also see increased tax revenue from deferred retirement.

This move should be accompanied by higher levels of paid vacation mandates, more in line with other OECD countries ( 4 weeks from year one). So as to allow greater work/life balance and less stress making it easier to work longer.

 

[AlvinofDiaspar]

I feel very strongly that we need to bump up the retirement age for just this reason.

When we adopted 65 as the retirement age, most people were dying at age 71, or retired for 6 years after working for more than 45.

Increased uptake of post-secondary education (and High School graduation more broadly) has workers entering the work force later on average, by several years. Meanwhile the life expectancy is closer to 81 than 71.....meaning
a pension is expected to sustain you for 16 years or so.

If we bumped the retirement age to 70 (we could provide carve-outs for physically demanding jobs where this is not possible) We could raising CPP/OAS paying outs by 42% with no change to premiums, or we would use a portion of that dividend to reduce personal/employer contributions.

We would also see increased tax revenue from deferred retirement.

This move should be accompanied by higher levels of paid vacation mandates, more in line with other OECD countries ( 4 weeks from year one). So as to allow greater work/life balance and less stress making it easier to work longer.

You will be hearing about CARP on Zoomerradio in no time. Also Harper tried this and got burned. Perhaps what they can do is to do it slowly - say pushing back the retirement age by one month over the course of 24 years to get it to 67.

AoD

 

[Northern Light]

You will be hearing about CARP on Zoomerradio in no time. Also Harper tried this and got burned.

True, he attempted to raise the OAS age (he need the provinces to bump CPP and he didn't get them on board).......... but he failed to pitch any benefit whatsoever.

He made it seem like a money grab by the government, which in his case, it was.

Because it was OAS/GIS not CPP there was no payroll tax reduction and there was also no benefit increase. So it came off as lose-lose.

It speaks to the importance of selling change.

Perhaps what they can do is to do it slowly - say pushing back the retirement age by one month over the course of 24 years to get it to 67.

AoD

Certainly the move would not be instant. I think it might look something like a bump to 66 with 5 years notice, then to 67 after 7 years, and 68 after 9 years and so on.

Regardless, Canadians need to see a benefit returned to them in exchange for the deferred benefit.

 

[chrisw]

People can already voluntarily decide to delay CPP until age 70 for increased benefits, and it can be quite beneficial. They can also take it early at 60 for a penalty.

I don't really get the reason for what you're proposing and why CPP needs to be fiddled with when the plan is sound.

Regardless there is already something similar to what you're thinking of. Every 9 years, the actuaries review the pension adjustment factors (early penalty, deferral benefit). It's possible in the future for the actuaries to suggest a bigger penalty for taking it early and/or a bigger benefit for deferring.

 

[Northern Light]

People can already voluntarily decide to delay CPP until age 70 for increased benefits, and it can be quite beneficial. They can also take it early at 60 for a penalty.

I don't really get the reason for what you're proposing and why CPP needs to be fiddled with when the plan is sound.

Regardless there is already something similar to what you're thinking of. Every 9 years, the actuaries review the pension adjustment factors (early penalty, deferral benefit). It's possible in the future for the actuaries to suggest a bigger penalty for taking it early and/or a bigger benefit for deferring.

CPP is sound, yes.

But OAS/GIS are not, they are funded from annual appropriations (general tax revenue and borrowing), but are tied to the retirement age.

It would make no sense to move the age for only one set of these, they should be moved in lock step.

****

One of the reasons OAS/GIS are such a drain is that CPP provides such a paltry payout. The last approved increase is still being phased-in, but takes CPP to a whopping 33% income replacement rate.

That's among the lowest in the OECD and puts extreme pressure on the government to direct other money to the elderly (OAS/GIS/Age-amount tax credit/GAINS credit etc.)

The fact OAS all pays out, in part, to households with income exceeding $140,000 per year, and the age amount goes to households with up to $103,000.........doesn't help matters.

Meanwhile, many low and lower-middle income earners simply can't afford to retire at the designated age.

Pushing the age up, allows the benefits I described above, it also means fewer people qualify for GIS as their income rises, and indeed more see their OAS phased out sooner for the same reason.

Now, while we're at it raising the age, we should also be lowering the phase-out on the OAS and the Age Amount to align with the new dentalcare scheme........... your cut-off at $90,000 per year.

This would likewise produce a dividend to the government which could be used to augment benefits for low and lower-middle income earners (or everyone with an income under 90k) and/or be used to reduce the deficit.

****

While I'm at it, we really do need to reset the workforce age brackets used by Stats. Can which have become laughably misleading.

The general definition counts everyone from age 15 up; and for most purposes has a cut-off of age 64.

Where as the majority of Canadians don't enter the labour force until age 18 or later; and whereas an increasingly large number of Canadians don't retire at 65 we have a misleading statistic.

We can, in a digital age, track any/all age ranges; but for the purposes of meaningful monthly statistic I would like to see 2 lower ranges, 18 and 22 which reflect typical post-high school and typical post-secondary graduation ages; while the upper age should be aligned with a higher retirement age noted above.

 

[chrisw]

While I'm at it, we really do need to reset the workforce age brackets used by Stats. Can which have become laughably misleading.

The general definition counts everyone from age 15 up; and for most purposes has a cut-off of age 64.

Where as the majority of Canadians don't enter the labour force until age 18 or later; and whereas an increasingly large number of Canadians don't retire at 65 we have a misleading statistic.

We can, in a digital age, track any/all age ranges; but for the purposes of meaningful monthly statistic I would like to see 2 lower ranges, 18 and 22 which reflect typical post-high school and typical post-secondary graduation ages; while the upper age should be aligned with a higher retirement age noted above.

You might be mistaken by the cut off for the Labour Force Survey, when they say 15 and up, I don't think they cut anyone off. Though patients in hospitals and nursing homes are excluded from the survey.

People also retire early.

Statcan uses "core working age" referring to individuals 25-54 years old. They also have 15-24 and 55 and up. This chart they used in the most recent report for the Daily. https://www150.statcan.gc.ca/n1/daily-quotidien/250509/t001a-eng.htm

They might have changed their default breakdown more recently to include those over age 64 but the data was in the survey.

Looking at the breakdown of age groups you can specify from the table they reference, Labour force characteristics by age group. (https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=1410028702)

You can choose, 15+, 15-64, 15-24, 15-19, 20-24, 25+, 25-54, 55+, 55-64.

They don't give the option to choose 65+ but you can calculate the data yourself.

There's also this article by StatCan recently released that analyzes some of the employment data of those ages 65-69 and 70-74 in 2022. "Employment by choice and necessity among Canadian-born and immigrant seniors" https://www150.statcan.gc.ca/n1/pub/36-28-0001/2024004/article/00002-eng.htm

Since March 2020, LFS respondents who were employed and aged 60 and older were asked the following question: “Some people retire, while others continue working, either by choice or by necessity. What was your main reason for working last week?” Answer choices were “by choice” or “by necessity.” Focusing the analysis on 2022 allows these responses to be examined by population group, about which the LFS started collecting information in January 2022.

Footnote from that article, interesting that in 2020 they started asking those over 60, whether they're working by choice vs necessity. I'm not entirely sure what they're referring to by the change in 2022.

 

[Bayer]

I can understand some people might think of work as an annoyance, but I'm 60, and I can't imagine retiring even though I'm at it seven days a week more often than not. I can't imagine getting my CPP and OAS before 70 unless I have to.

 

[zang]

I can understand some people might think of work as an annoyance, but I'm 60, and I can't imagine retiring even though I'm at it seven days a week more often than not. I can't imagine getting my CPP and OAS before 70 unless I have to.

People age differently.

Two equally healthy and active people can see enough physical and mental decline to affect the ability to work at two entirely different ages. Some people can be vibrant and active into their 90s. Some people hit that wall in their 60s.

There's not a lot you can do in such cases. Genetics plays a big part.

 

[lenaitch]

People age differently.

Two equally healthy and active people can see enough physical and mental decline to affect the ability to work at two entirely different ages. Some people can be vibrant and active into their 90s. Some people hit that wall in their 60s.

There's not a lot you can do in such cases. Genetics plays a bit part.

Agree. In addition, certain jobs can age people differently, or require physical or mental stamina or dexterity that naturally decline.

 

[Bayer]

People age differently.

Two equally healthy and active people can see enough physical and mental decline to affect the ability to work at two entirely different ages. Some people can be vibrant and active into their 90s. Some people hit that wall in their 60s.

There's not a lot you can do in such cases. Genetics plays a big part.

Indeed, if I had a physical job I would have already lost it due to my deteriorating spine.