Prime Minister Stephen Harper could have picked a better place than Davos, Switzerland, to signal vague plans for changes to Canada’s retirement income system. A more appropriate venue would have been in Parliament, where the opposition could get to ask a pointed question or two.

In the midst of lecturing the Europeans on their profligacy at the World Economic Forum, Harper dropped a bombshell by serving notice that he’s rethinking our “retirement income system” to cope with the pressures from an aging population. In his view, the Canada Pension Plan is fully funded and needs no changes. But the Conservatives intend to rejig other aspects of the system “to ensure sustainability” for future pensioners.

Inevitably, that leads to speculation that Ottawa has the Old Age Security program squarely in its sights. Harper seemed to be trying to “precondition us to cuts,” Liberal MP Scott Brison said. Federal officials all but confirmed that by issuing worrisome OAS statistics.

Dating back to 1952, OAS was designed to provide a basic minimum income for seniors. Today roughly 4.9 million seniors age 65 and over get up to $540 a month under the program, at a cost of about $36 billion. But that cost will hit $108 billion by 2030 as the number of seniors grows to 9.3 million. In part that’s simply because Canadians are living much longer. In 1952 men lived to 66 on average and women to 71. Today it’s 78 and 83. By 2030 those numbers are expected to be around 82 and 86.

It’s worth bearing in mind that the future OAS tab won’t look quite as daunting as it seems now, because Canada’s economy will grow over the next two decades. But costs are undeniably going up.

If the Conservatives are prepared to brave a political storm they can hold down those costs by making future pensioners wait, say, two more years until they are 67 before collecting. While Harper says current recipients will not be affected, over time that would hit millions of voters in the pocketbook. As New Democrat MP Peter Julian rightly noted, seniors would take it as “a slap in the face.”

The government could also step up future OAS “clawbacks.” Retirees who earn between $70,000 and $113,000 net income already have to repay part or all of the pension, according to Service Canada. Hiking the clawback would be unpopular, too. So would partially de-indexing OAS benefits that now rise to offset inflation.

Just what Harper envisages isn’t clear. But at a time when many Canadians worry about their private pension plans’ solvency, and when the CPP provides a maximum payout of barely $12,000 a year, paring back the OAS would hurt a lot of pensioners. That would be both ironic and damaging, given concern about the growing gap between rich and poor.

An alternative favoured by the New Democrats and Liberals would be for Ottawa to put more into the OAS program instead of buying warplanes and building prisons. There have been calls, too, to improve the CPP so that fewer people will need to rely on the OAS.

But first, Canadians need to know just what the Prime Minister has in mind. Then we can have a sensible policy debate on the challenges that lie ahead, and how we can meet them.

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