Seniors’ discounts a worsening drain on public purse, report warns

Posted on in Child & Family Policy Context

OttawaCitizen.com – opinion/columnists
February 27, 2015.   David Reevely

Discounts on public services for senior citizens who can afford to pay more are bad for us, says a new report that, politics being what it is, will go nowhere.

It’s a particular problem for city governments and it’s going to get worse.

Things like cheaper transit fare for seniors date from a time when “old” and “poor” were practically the same thing, according to Harry Kitchen, an emeritus professor (that is, a semi-retired one) at Trent University who’s practically the only academic expert on municipal finances Ontario has. We dressed it up in a white lie about gratitude for years of hard work building our prosperous society, but it was really about alleviating poverty.

Age and poverty haven’t been the same thing for a long time, Kitchen says in his report for the respected Institute for Research on Public Policy.

Thanks to aggressive pension and guaranteed-income programs, the poverty rate among seniors has fallen from 36 per cent in the 1970s to about 12 per cent — lower than the rate among younger people.

“The generally lower incidence of poverty among the elderly provides little or no justification for continuing subsidies of whatever kind on the basis of age,” Kitchen writes.

The city charges for water and electricity based on how much you use, regardless of how old you are. What principle makes a seat on a bus different? There’s a huge price gap once you hit 65: A monthly senior bus pass costs $40.75 now, compared with $100.75 for an “adult” pass. Even a pass for teenagers costs $80.25, and that’s mainly for getting to school.

Why does access to the same city pool for the same public swimming session cost $2.40 if you’re 68 but $4.12 if you’re 62?

OC Transpo has wrestled with this already, warning in 2012 that a projected doubling of Ottawa’s senior population over 20 years means “substantial long-term issues for transit service.”

There’s some social benefit to it, says Coun. Stephen Blais, who represents Cumberland and chairs the city’s transit commission. Charging less for transit and recreation can encourage older people to get out more, which is healthy for them and indirectly good for everyone. But mainly, yes, the premise is that seniors are poor.

Certainly some are. But as a group, Baby Boomers are expected to be the most affluent retirees we’ve ever seen. Meanwhile, the society they’ve built is struggling with how to pay for basic public services.

Private companies routinely offer senior discounts. But it’s still profitable to let someone into a movie for $8 instead of $11, particularly if they buy popcorn and pop at the same price as everyone else. City services don’t work that way: as a rule, the more people use them, the more they cost.

If discounts only give seniors access to the same user-pay services as everybody else, that’s just smoothing out an inequity. But they don’t. They create an unfairness when they’re supposed to be solving one.

“The longer municipalities continue to subsidize services based on age, the more difficult it will be to correct this inequity and introduce more efficient pricing and taxing policies,” Kitchen writes.

There may, at least in theory, be a better way of deciding who gets cut-rate bus passes.

“A means test would be the ultimate,” says Blais. “But the question is do we as a municipality have the capacity to do that? Both technologically, just as a matter of gathering and tracking that data, and legally, with all the privacy considerations and all that?”

As a city councillor, Blais says, he hears a whole lot more from seniors who want more discounts rather than fewer. Even talking about the idea would be tough for a politician hoping to be re-elected.

Ideally it would be part of a bigger conversation about why we charge people more taxes for living in compact central neighbourhoods that are cheaper for the city to serve with things like garbage collection and libraries — another subject politicians, both local and provincial, are only likely to take up if they wake up feeling like kamikaze pilots.

Failing a big structural change like that, Kitchen writes, doing away with seniors’ discounts for public services could be paired with more generous programs specifically aimed at helping poor seniors, so the money benefits only people who need it.

It won’t be easy, but the longer we wait, the more politically difficult it’ll become.

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