Social Policy in Ontario

While youth struggle, Canada is giving billions to its wealthiest demographic

Posted on June 14, 2026 in Equality Policy Context

Source: TheStar.com — Authors: Sabrina Maddeaux

TheStar.com – Opinion
June 14, 2026.   By Sabrina Maddeaux, Contributor

When a government spends more money on its wealthiest class than anyone else, even as others fall further and further behind, something is profoundly broken. This is Canada’s current reality, where elderly benefits are the federal government’s single largest line item even though seniors are the country’s wealthiest cohort.

The most egregious offender is Old Age Security (OAS), which isn’t funded through invested individual or employer contributions, but general tax revenues. Its monthly payments don’t target low- or even middle-income seniors, but stream generously to individuals ages 65 to 74 who earn up to $148,451 per year and up to $154,196 per year for those over 75. Means testing only begins at an individual income of $90,997 per year.

This means couples who earn up to $181,994 a year can receive full OAS pensions and couples over 75 who earn up to $308,392 per year still receive partial pensions. Asset wealth isn’t taken into account at all, and there’s no requirement recipients be fully or even partially retired.

OAS was originally designed for a different economic era, one where low incomes and deep poverty among seniors were much more common. While there are still seniors who live in poverty, elderly benefits now both simultaneously fail to meet their inflation-adjusted needs while further burdening struggling younger Canadians — all while paying out billions to those who need it least.

Refusing to bring elderly benefits in line with modern realities unfairly disadvantages newer generations both now and, if the system isn’t reformed, well into their futures.

Canada isn’t in a position where we don’t have to make tough choices about spending. Every dollar we send to financially comfortable, and even wealthy, seniors is a dollar that isn’t spent elsewhere.

Take the federal Canada Child Benefit, which gets means tested once family income exceeds $37,487 and cuts off entirely at a family income of $250,000. Meanwhile, child poverty in Canada is rising each year with nearly one in five children under the age of six living in poverty, and those below the poverty line experiencing deeper states of poverty than prior to the pandemic.

The juxtaposition between generous benefits for wealthy seniors and stringent, insufficient benefits for struggling young families makes it clear the federal government urgently needs to reduce and rebalance its books as the national debt is expected to surpass $3 trillion over the next five years.

But clawing back glaring examples of generational inequality like OAS and investing more resources into young families is only part of the solution. Meaningful reforms need to consider not just what retirement looks like today, but what it looks like in decades to come. It’d be short-sighted to assume it remains the same.

As with so much of their generational experience, Baby Boomers’ fortunes into their senior years may be more of a historic anomaly than a new status quo. We may be witnessing “peak retirement,” with a return to rising rates of poverty among seniors as the economic disadvantages experienced by millennials and Gen Z compound over a lifetime.

Newer generations have been simultaneously financially hammered by housing and asset inflation, successive economic downturns that disproportionately impacted young workers, changes in retirement benefits offered by employers, and outdated government tax and benefits systems that don’t match the changing nature of work or economic landscape.

The system can no longer take for granted home equity built over a lifetime to support retirement, or even that many younger Canadians will be able to achieve mortgage or rent-free status in their senior years. The assumption of a “standard employment model” of full-time, uninterrupted work for a single employer over 30 years, who provides generous pensions or matching contributions, also no longer holds.

Retirement costs are very likely to be significantly higher in the future, supported by fewer investments and savings.

Successfully reforming the system means realigning OAS and other benefits with the Boomer generation’s financial reality, but it must also mean reimagining retirement savings vehicles, plans, and employer incentives to give younger workers solid ground to build financially secure futures upon. The time to prevent a seniors’ poverty crisis in 30 to 40 years is now — not when it’s already too late.

Sabrina Maddeaux is a Toronto-based political columnist, broadcast commentator and National Magazine Award winner.

https://www.thestar.com/opinion/contributors/while-youth-struggle-canada-is-giving-billions-to-its-wealthiest-demographic/article_04588727-7aab-405a-8925-26b6b7eec25d.html

Tags: economy, featured, pensions, Seniors, standard of living, tax, youth

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