Categories: National News

Budget 2012 cuts jobs, changes access to Old Age Security

More than 19,000 Canadians will lose their federal government jobs while retirees will have to wait an extra two years to claim Old Age Security (OAS).

This comes as part of the 2012 federal budget released in the House of Commons Thursday, aimed at strengthening the economy, increasing jobs and facilitating growth.

“In this budget, our government is looking ahead, not only over the next few years but also over the next generation,” said Finance Minister Jim Flaherty. “Looking ahead, Canadians have every reason to be confident.”

The federal government will spend roughly $273 billion in 2012-13 while collecting roughly $248 billion in taxes and other revenues. This leaves a federal deficit of $24.4 billion, down from $32.3 billion last year.

Departmental spending was scaled back by $5.2 billion, with the largest reduction to the Department of National Defence at $326.8 million, followed by international assistance at $180.7 million and public safety at $179.4 million.

Edmonton-St. Albert Conservative MP Brent Rathgeber said he will vote in favour of the budget and although he thinks the move to shrink the federal government is “politically courageous,” he said more could have been done.

“The cost and size of the federal government has bloated and I would suggest has bloated unnecessarily,” he said. “I wouldn’t have been unhappy if the government had moved more aggressively in respect to cost containment and reducing the size of the federal government.”

Over the next three years, 19,200 federal employees will be out of work, with 7,200 through attrition. Rathgeber said it is unlikely the greater Edmonton area will be affected by the lay offs.

“I would be surprised if there’s any significant effect of displacement in Edmonton,” he said. “We just simply don’t have enough people that work for the federal government.”

Rathgeber said this is a step in the right direction to reduce the cost and size of the federal government as well as encourage individuals to seek employment in the private sector.

“We need to divert people away from the public sector into the private sector where there’s high-paying, wealth-generating jobs,” he said. “The purpose of this is to reduce the size of government and to transition workers who are unfortunately displaced into the private sector.”

To encourage private-sector growth, $205 million will be allocated over one year for a hiring credit for small businesses.

Old Age Security

The OAS eligibility age increase from 65 to 67 years old will be phased in over a six-year period starting in 2023.

“The Old Age Security program was designed for a much different demographic future than Canada faces today,” Flaherty said. “Canadians are living longer and healthier. There are fewer workers to take their place when they retire.”

The program began in the 1970s, when the life expectancy was roughly a decade shorter than today. The birth rate at this time was also much higher than today.

Rathgeber said the age increase is a step in the right direction and by announcing it now, will give Canadians enough time to plan for their futures.

“This trend is clearly unsustainable and must be addressed now in order to avoid a catastrophic collapse to the entire system,” he said. “If changes aren’t made to Old Age Security, there will be no old Old Age Security for anybody because the system will go bankrupt.”

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