Each June seniors month provides Canadians with the opportunity to reflect on how to better promote healthy aging, by supporting older adults to live their best life. Having worked directly with this community, I know that for many older adults living their best life means aging in a healthy way that allows for full life and community engagement. And, according to the World Health Organization (2017), “for the first time in history, most people can expect to live into their sixties and beyond. A longer life represents an important opportunity, not only for older people and their families, but also for societies as a whole”. The World Health Organization also recognizes that “societies that adapt to this changing demographic and invest in Healthy Ageing can enable individuals to live both longer and healthier lives and for societies to reap the dividends”. Further, in 2014 the World Health Assembly developed a global strategy and action plan on ageing and health. This plan was developed in an effort to promote healthy ageing, and the construction of effective systems to better meet the needs of older adults. With a large and growing cohort older adults, the implementation of this plan is more important than ever. According to the 2016 Statistics Canada Census “there are now more seniors (5.9 million) than children (5.8 million); and this is the first time that has happened”.
It would be great if we could use seniors month to reflect on how we might best support healthy aging for “all” Canadians. According to the National Seniors Strategy of Canada (2017), we need to understand that “given the personal and societal risks that exist with having more older Canadians unprepared to meet their future financial obligations, the federal, provincial and territorial governments should consider how best to enhance public pension vehicles; particularly as they relate to vulnerable groups such as older adults who are single and women”. Further to this, the National Seniors Strategy(2017) has also suggested that the following two issues are of paramount importance if we want to support healthy aging for “all” Canadians.
1) Many Older Canadians Remain Financially Vulnerable:
- Evidence overwhelmingly demonstrates that single, unattached older adults as well as older women remain the most financially vulnerable members of our society. We know that 6.2% of attached versus 28.5% of single older adults in Canada are considered low-income according to the LIM-AT.16 Additionally, older Canadian women, “are twice as likely to live in poverty as men”; with 30% of older Canadian women living below the poverty line.17 This striking difference can be explained largely due to a greater likelihood of gaps in their workforce participation while at the same time, experiencing longer life expectancies.
- Life expectancy difference also helps to explain Canadian also represent a significant portion (70%)18 of the single older adult category mentioned above. Due to prior workforce participation gaps, older Canadian women are therefore far more reliant on publically- funded, federal income supports such as GIS and OAS; versus contribution dependent pension plans like Q/CPP and private pension schemes.
- In fact, 30% of an older Canadian woman’s total income is supported by OAS and GIS, compared to 18% of their male counterparts’.19 Though supports such as GIS do take into account marital status in an effort to recognize gender inequity in retirement income, the fact that 30% of older Canadian women still live below the poverty line demonstrates that marital status considerations do not adequately offset the gender gap. Inequity of this scale, therefore, remains a cause for great concern and should be addressed in future income support funding reforms.
2) Current Retirement Saving Vehicles Don’t Sufficiently Support Most Canadians:
- Mounting evidence suggests that current retirement savings vehicles and public pension plan programs are also falling short in supporting many older Canadians as they age. As a way to supplement federally administered income support programs such as CPP, OAS and GIS, personal savings mechanisms have been introduced over the past few decades such as RRSPs and TFSAs. The challenge with these personal private savings vehicles is that only individuals with higher than average annual incomes can reasonably contribute to realize any meaningful income support later in life. Beyond the inherent inequity of relying on the aforementioned private savings vehicles, pension plans are often upheld as being far superior towards an individual’s return on investment.
- The C.D. Howe Institute, the Canadian Centre for Policy Alternatives and others have articulated that, “as a retirement savings vehicle, pension plans are superior to RRSPs in every practical way”20 principally as they do not rely on private investment products like mutual funds which have some of the highest management fees for Canadians compared to the rest of the world In general. In addition to public plans such as OAS and GIS being accessible to all Canadians, enhanced public pension plans are being promoted as more efficient retirement savings vehicles for Canadians given their ability to reduce administrative costs, the fact they are protected from creditors, require no self-management of funds, and provide greater tax-deferral room for older adults.21
- While being considered a better alternative to personal private savings vehicles, our public pension plan arrangements are not ideal in their current state. That OAS benefits are considered taxable income – meaning the federal government recoups a portion of what it pays out when a single individual may only take home a maximum combined OAS and GIS monthly payout of $1,342.78 – remains a cause for concern. Additionally, effective April 2023, older Canadians will have to wait an additional two years to access their GIS and OAS benefits as legislation was passed that will raise the age of eligibility from 65 to 67.22 While some proponents argue that this will not be a significant issue as many Canadians are expected to continue working beyond the age of 65, but for others who are more likely to perform manual labour and want or need to retire earlier, it is expected to put more older individuals before the age of 67 at risk of living in poverty.
This seniors month, it is important to note that healthy aging should concern everyone; as we are all aging, or will be supporting someone who will be aging into care.