A new study of the incentive effects of retirement income programs like CPP, OAS and GIS finds they matter a lot. Policy-makers beware

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It’s an ill windbag that blows no good, as you might say, and Bloc Québécois Leader Yves-François Blanchet’s demand that the federal Liberals raise Old Age Security payments by 10 per cent for younger seniors (those aged 65-74) or lose his support in the Commons at least has people talking about OAS.

In FP Comment yesterday, economist Pierre-Carl Michaud suggested we give thought to folding OAS into the Canada and Quebec Pension Plans. OAS preceded CPP/QPP by 15 years, replacing the federal-provincial Old Age Pension ($240 a year for people who made less than $365 a year) established in 1927. (In today’s dollars those amounts are $4,296 and $6,533.50.) When OAS started, in 1952, it was $480 per year for anyone 70 years of age or older. (That’s $5,484.26 in $2024.) In 1952 under eight per cent of Canadians were over 65, let alone 70. Today more than 20 per cent are. The annual payment to people 65-74 is currently $8,732, though it’s phased out at a rate of 15 cents on the dollar starting at an income of about $91,000.

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In the early 1950s, a 65-year-old man could expect to live another 10........

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