As the Bloc Québécois pushes for broader OAS payments, concerns rise over the impact on disability benefits
Canada's budget watchdog warns that the federal government may struggle to meet its fiscal anchors, particularly regarding disability benefits, as reported by CTV News.
This concern arises if it agrees to the Bloc Québécois' demand for expanded seniors benefits in exchange for supporting the minority Liberal government.
Bloc leader Yves-François Blanchet confirmed last week that his party will vote against a Conservative non-confidence motion scheduled for this week.
This support allows the Liberals to avoid an immediate election. In return, Blanchet is pushing Prime Minister Justin Trudeau's government, through a private member’s bill, to broaden the increase in Old Age Security (OAS) payments to include pensioners aged 65 to 74.
The Liberals previously announced a 10 percent increase in OAS payments in 2022, but this only applied to those aged 75 and older. “We have deposed a law which is now at the very centre of the survival of this government. This is what we call power,” Blanchet stated to reporters on Thursday.
Parliamentary Budget Officer Yves Giroux highlighted the financial implications of the Bloc’s request during an interview with Vassy Kapelos on CTV’s Power Play.
He estimated that expanding benefits to those aged 65 to 74 would require an annual expenditure exceeding $3bn, totaling approximately $16.1bn over five years. Giroux noted that this could complicate the government's existing fiscal framework.
“It would also be a bit tricky to make that fit within the fiscal framework that the government has indicated itself in the last budget... that would be a significant chunk of change, to say the least,” he explained.
He referred to the government’s targets to keep the deficit below $40.1bn for the current fiscal year and to reduce both the debt-to-GDP and deficit-to-GDP ratios by 2024-2025.
Additionally, the government aims to limit deficits to one percent of GDP by 2026-2027. Giroux warned that “all these constraints would be at severe risk if the government was to acquiesce to that demand without cutting expenditures elsewhere.”
Deputy Prime Minister and Finance Minister Chrystia Freeland addressed the Bloc’s demand on Tuesday. When asked about the federal government's capacity to afford the proposed expense, she stated that “conversations are ongoing.”
Freeland added, “We are having good conversations about all possible economic measures with both the Bloc and the NDP.”
