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Economy

Canadians should understand costs of expanding Old Age Security

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4 minute read

From the Fraser Institute

By Jake Fuss and Grady Munro

In yet another high-stakes maneuver in the fall session of Parliament, the Bloc Québécois recently tabled a motion urging the Trudeau government to support Bill C-319, which would increase Old Age Security (OAS) payments for seniors aged 65 to 74 by 10 per cent. The motion passed and the Bloc is threatening to trigger an election if the Trudeau government doesn’t give the bill final approval before October 29.

Meanwhile, according to a new poll, 79 per cent of Canadians “support or somewhat support” the OAS increase. But crucially, the poll provided no information to respondents about the costs associated with expanding OAS, even though Canadians should understand the costs before they pledge support for any government program.

Consider this—according to past polling, more than two-thirds of Canadians expressed support for the Trudeau government’s national dental care, $10-a-day daycare, and pharmacare programs. Yet once respondents were made aware of potential tax increases (specifically, increases to the GST), support plummeted to less than 50 per cent for all three programs.

Clearly, support for government programs can change dramatically once Canadians understand the costs since they ultimately must pay those costs. So, that being said, what are the costs of a 10 per cent increase in OAS payments for seniors aged 65 to 74?

According to the Parliamentary Budget Officer Yves Giroux, the policy would cost more than $3 billion a year, with a five-year price tag of $16.1 billion—a “significant chunk of change” in his words.

Based on its latest budget, the Trudeau government expects to run deficits of at least $20.0 billion for the next five years and rack up more than $400 billion in new debt by 2028/29. If the government borrows more money to pay for increased OAS benefits, that debt number will grow even larger.

And again, Canadians will ultimately bear the costs of an expanded OAS through higher taxes in the future because Canadians must pay interest on government debt. This fiscal year (2024/25) federal debt interest costs are already expected to reach $54.1 billion—which is equal to the entire amount raised by the GST. These are taxpayer dollars that won’t go towards any services or programs for Canadians, and interest costs will continue to grow as the government adds more and more debt.

Finally, in addition to being costly, the plan is poorly targeted. While some programs such as the Guaranteed Income Supplement (GIS) provide additional income support to low-income seniors, OAS provides support to many upper middle-income seniors. Indeed, based on current thresholds, individual seniors (aged 65 to 74) earning up to $148,451 per year are eligible to receive OAS (though seniors earning more than $90,997 of income don’t receive the full amount). Therefore, if Bill C-319 becomes law, a senior couple with a combined household income of nearly $300,000 will receive an increase in their OAS payments.

Increasing OAS payments will cost billions each year while supplementing the income of many seniors who aren’t in need. Despite the political theatre in Ottawa, Canadians are ultimately the ones who will foot the bill.

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Economy

The White Pill: Big Government Can Be Defeated (Just Ask the Soviet Union)

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From StosselTV

People have been “black pilled” to think the world is doomed. Michael Malice says there’s hope.

In his book, “The White Pill,” he argues that tyrannical regimes, like the Soviet Union, can be toppled.

Today, media and universities distort history, and push socialism. It used to be worse. The New York Times once covered up Stalin’s famine, even as millions starved. Why? Malice says it’s because NYT star reporter Walter Duranty liked communism’s utopian promises, and status he got from his exclusive Stalin interviews.

Malice says the fall of the Soviet Union should give us hope that America can resist the universities and media’s brainwashing – or any tyranny that someone is “black pilled” about.

Our video explains Malice’s “white pill” and why you might want to take it.

After 40+ years of reporting, I now understand the importance of limited government and personal freedom.

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Libertarian journalist John Stossel created Stossel TV to explain liberty and free markets to young people.

Prior to Stossel TV he hosted a show on Fox Business and co-anchored ABC’s primetime newsmagazine show, 20/20.

Stossel’s economic programs have been adapted into teaching kits by a non-profit organization, “Stossel in the Classroom.” High school teachers in American public schools now use the videos to help educate their students on economics and economic freedom. They are seen by more than 12 million students every year.

Stossel has received 19 Emmy Awards and has been honored five times for excellence in consumer reporting by the National Press Club. Other honors include the George Polk Award for Outstanding Local Reporting and the George Foster Peabody Award.

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To get our new weekly video from Stossel TV, sign up here: https://www.johnstossel.com/#subscribe

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Alberta

Emissions cap threatens Indigenous communities with higher costs, fewer opportunities

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Dale Swampy, founder of the National Coalition of Chiefs. Photograph for Canadian Energy Centre

From the Canadian Energy Centre

By Deborah Jaremko

National Coalition of Chiefs founder Dale Swampy says Canada needs a more sustainable strategy for reducing emissions

The head of the National Coalition of Chiefs (NCC) says Ottawa’s proposed oil and gas emissions cap couldn’t come at a worse time for Indigenous communities.

Dale Swampy says the cap threatens the combined prospect of higher costs for fuel and groceries, along with fewer economic opportunities like jobs and revenues from involvement in energy projects.   

“Any small fluctuation in the economy is affected on our communities tenfold because we rely so much on basic necessities. And those are going to be the products that increase in price significantly because of this,” says Swampy, who founded the NCC in 2016 to fight poverty through partnerships with the natural resource sector.

He says that of particular concern is the price of fuel, which will skyrocket under the emissions cap because it will force reduced Canadian oil and gas production.

Analysis by S&P Global found that meeting the cap’s requirements would require a production cut of over one million barrels of oil equivalent per day (boe/d) in 2030, and 2.1 million boe/d in 2035.

“Production gets reduced, and the cost of fuel goes up,” Swampy says.

“Our concern is that everything that has to do with both fuel for transportation and fuel to heat our homes is amplified on First Nation communities because we live in rural Canada. We live in isolated communities, and it costs much more for us to operate our daily lives because we have to travel much further than anybody in a metropolitan area. So, it’s going to impact us greatly.”

Indigenous communities are already stretched financially, he says.

“What you could buy in 2019 terms of meat and produce is almost double now, and even though the inflation rate is trending downwards, we still haven’t gotten over the impact of what it costs for a bag of groceries these days,” Swampy says.

“In our communities, more than half are under the age of 21, so there’s a lot of bigger families out there struggling to just get food on the table.”

The frustrating timing of the cap is that it comes amid a rising tide of Indigenous involvement in Canadian oil and gas. Since 2022, more than 75 Indigenous communities in Alberta and B.C. have agreed to become part owners of energy projects.

Three major projects – the Trans Mountain Pipeline Expansion, Coastal GasLink Pipeline and LNG Canada export terminal – together have spent more than $11 billion with Indigenous and local businesses.

“We’re at a turning point right now. There’s a real drive towards getting us involved in equity opportunities, employment opportunities, and contracting opportunities,” Swampy says.

“Everybody who didn’t talk to us in the past is coming to our front door and saying, ‘Do you want to work with us?’ It couldn’t come at a worse time when we have this opportunity. The emissions cap is going to reduce the amount of activity, and it’s going to reduce the amount of investment,” he says.

“We’re part of that industry now. We’re entrenched in it now, and we have to support it in order to support our people that work in this industry.”

Economic growth, and more time, is needed to fund development of low emissions energy sources without ruining the economy, he says.

“I think we need more consultation. We’d like to see them go back to the table and try to incorporate more of a sustainable strategy for emission reductions,” Swampy says.

“We’re the only country in the world that’s actually incorporating this type of legislation. Do you think the rest of the world is going to do this type of thing? No, they’re going to eat our lunch. They’re going to replace the production that we give up, they’re going to excel in the economy because of it, and they won’t talk about significant emission reduction initiatives.”

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