OTTAWA - Delaying the age of Old Age Security by two years could cost Ontario more than $200 million annually, according to the province’s Ministry of Finance.
Ontario has yet to be consulted on any federal proposal to change the retirement income system, including any changes to OAS eligibility.
“We wish we had been, as it will have wide-ranging implications of Ontario’s seniors and the retirement income system,” said Aly Vitunski, a spokeswoman for the Ministry of Finance.
The comments come amidst widespread speculation that the Conservatives plan to form the retirement income system by pushing back the age of eligibility for OAS payments by two years to the age of 67.
Pending the details of any proposed changes, provinces like Ontario could be on the hook for providing social assistance payments for a longer period of time.
Many social assistance recipients no longer qualify for Ontario’s welfare and disability program once they are eligible for OAS because the former programs only kick in if a person’s financial needs are not met through other sources. For many of those who turn 65-years-old, OAS in conjunction with the Canadian Pension Plan and the Guaranteed Income Supplement eliminates or reduces the need for social assistance.
“It is currently estimated that this will cost the Province more than $200 million per year,” Vitunski said. “There would also be impacts on to Ontario tax revenue and expenditure.”
In December 2011, there were 98,483 recipients of some form of social assistance between the ages of 55 and 64 in Ontario. The average monthly payment for welfare was $670 and $967 for provincial disability.
Earlier this week, Quebec’s provincial leaders warned the federal government not to make any unilateral decisions on retirement reform.
“In a democracy, you can’t just say, ‘I won, you lost, I’m going to do what I want’,” said Quebec Premier Jean Charest about the plan during a press conference earlier this week. “It can’t be done. Especially when it affect everyday lives and provincial budgets.”
Charest’s Employment Minister Julie Boulet said a delay in the OAS eligibility age would cost the province in the “tens of millions” in welfare payments to low-income seniors between the ages of 65 and 67.
The clash over retirement income reform isn’t the first between the provinces and Ottawa since the May 2 federal election. Provinces are upset over Ottawa’s recent unilateral changes to health-care funding as well as its costly omnibus crime bill.
The federal government has refused to say what its plans on pension reform are only to say that changes are necessary for the long-term sustainability of the system.
When asked whether the provinces would be consulted on any future changes to the country’s retirement income system, a spokeswoman for Human Resources Minister Diane Findley said it is too early to say.
“We are consulting with Canadians all across the country on our plans to strengthen Canada's economic recovery and improve our financial security,” said Alyson Queen in a statement. “However, we cannot speculate on consultations regarding a policy that has not yet been announced.”
-With files from The Canadian Press
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