Program Estimated to Cost $100B by 2029
In early March 2024, the Parliamentary Budget Officer of Canada released a report estimating that elderly benefit costs (OAS and GIS) were expected to surge 44% by 2029 — from $69.4B in 2023, to $99.7B in 2029.
While it is well known that Canada’s population is aging, what is shocking is the pace at which the benefit costs are actually rising.
Numbers Already Blowing Past Targets
Today, the Department of Finance released their Fiscal update for January 2024, and Elderly Benefits are already up 10.2% in a single year! This is double the PBO estimate.
2023 Costs Already 9.2% Higher than Projected
Since the Department of Finance’s numbers are for nine months, when we annualize the cost of Elderly Benefits for Apr to Jan 2024, we get a total yearly cost of $83.8B, a number $7B higher than the PBO had estimated.
The Projected 44% Increase by 2029 Might be Too Low
As mentioned, it appears as though the PBO may have underestimated elderly benefits by $7B for this fiscal year — maybe its because of the new Federal Dental Benefit, maybe its something else.
What’s important here, though, is that if the PBO is that far off in its 2023-2024 projection, it puts their whole model at risk.
This surprise increase puts Canada on road to seeing a 50%+ increase in Elderly Benefit costs by 2029. Are Canadians ready for this expense?
