canadian tax

2017 CANADIAN BUDGET PREVIEW: Could Feds Provide Tax Breaks to Seniors?

Back in 2015, the Liberals pledged to enhance the Old Age Security and Guaranteed Income Supplement with a new Seniors Price Index. OAS and GIS payments already rise with inflation, but the Liberals noted that, according to a Statistics Canada study, the price of most things seniors buy tends to rise faster, so a new index would help them keep up with the cost of living.

Meanwhile, in its alternative budget, the Canadian Centre for Policy Alternatives suggested indexing OAS to the average industrial wage and salary instead of the CPI to ensure the flat retirement benefit keeps up with earned incomes. The centre also recommended increasing the incomes of the lowest income single seniors by $1,000 by boosting the GIS top-up. Changes to the Canada Pension Plan were already announced by the Feds this summer, but the centre wants to go further, increasing the CPP income replacement rate to 50% of earnings (it’s currently at 25%, scheduled to rise to 33.3% by 2023).

One other possible change to the budget involves extending the retirement age to 67 from 65. The previous Conservative brought in this change when it was in power, and intended to phase it in gradually. But when the Liberals gained power, they promptly reversed the retirement age back to 65. But with more Canadians living and working longer, the change to age 67 might make sense, and the Liberals may be considering an about-face on this controversial issue.

MT Newswires will be providing extensive coverage of Budget 2017, with Ottawa correspondent Doug Watt providing stories from the lockup and filing those stories as soon as the budget embargo is lifted at around 4 pm ET on Mar. 22.