Canada Hikes Retirement Age to 67 in Fed Budget
Canada’s Conservative government said Thursday that it is raising the retirement age to 67 from 65 for pension benefits as the finance minister introduced a federal budget features the biggest cutbacks since the mid-1990s.
Jim Flaherty presented a budget that sees cuts of a total of $5.2 billion in annual federal spending in the government’s first budget since the Conservative party won majority rule.
The government said delaying retirement benefits, worth more than $6,000 a year, for two years, will encourage people to stay in the workforce longer and save the government billions of dollars.
“Canadians are living longer and healthier. There are fewer workers to take their place when they retire. Canada has changed. Old Age Security must change with it,” said Flaherty. “In this budget our government is looking ahead not only over the next few years but also over the next generation.”
But the changes won’t kick in right away. The government will start making the adjustments in 2023 and phase them in gradually over six years.
The 500-page document highlights spending cuts on everything from environmental monitoring to military spending to funding for the Canadian Broadcasting Corporation, along with scrapping the money-losing penny in the process.
The Conservatives held a minority government for the past five years until last May when it rose to majority status. By wielding a majority position, the government no longer has to pander to the opposition parties with a socially democratic budget. Prime Minister Stephen Harper has been striving for a budget surplus and this budget, while more modest than analysts expected, enables that mandate for the next three years.
The 2008 global economic crisis forced the Conservatives to pump stimulus money into the economy, along with its fellow G7 counterparts, causing Canada’s deficit to rise.