I have suggested that Canadians can most likely count on the Canada Pension Plan (CPP) to be there when they retire. There is no cry to lessen that pension plank, in fact the CPP program is being enhanced by the government of the day. That said, the current form of Old Age Security is facing scrutiny and challenge. OAS is experiencing an ongoing communications “assault”. It appears that certain forces are trying to shape public opinion and soften us up, so that changes to the OAS system become more acceptable. In the end, can Canadians count on Old Age Security?
The challenge to Canada’s Old Age Security system is spearheaded by an outfit called Generation Squeeze. They recently conducted a poll (of just 1000 Canadians) that suggests 73 per cent of respondents support cutting Old Age Security (OAS) benefits for higher income Canadians.
It’s a curious poll as it actually shows that more Canadians think the OAS levels are right or should be increased (46%) compared to those who think the OAS levels should be reduced (40%). I’m “guessing” that most of the 40% were influenced by that nod to helping lower income seniors. Who doesn’t like the idea of helping poor seniors?
They are also targeting two of the core and meaningful tax benefits that help lower income and middle class/upper middle class retirees, the age amount and the pensionable earnings credit.
I found this mention quite alarming.
Meaning? They might be coming for some or all of your OAS payments, and they’re looking to remove or change seniors’ tax credits.
Are your Canadian dividends safe?
The poll also mentions your investments and the special treatment of your Canadian dividends. Now there’s an angle, ha. Do Canadians and Canadian retirees know they might be coming after your dividends? Oh man, get out the pitchforks.
Targets: OAS + Seniors’ Tax Credits + Your Retirement Portfolio
If you want to do some more addition/math (dot connecting exercises) consider that Generation Squeeze receives funding from many government agencies. Is this outlet getting its marching orders from their financial backers in Ottawa? Are they being paid to soften us up? Who knows? Let’s do a poll to find out 😉
Your Retirement Income Pillars
Retirees and financial planners have already built retirement plans around the retirement income pillars, that includes CPP and OAS – the government benefits pillar. Will they kick out one of those legs? Is personal savings next? How about a wealth tax that would include your home value?
That BNN Bloomberg post from Dale Jackson lists some of the key strategies on how you can manage OAS and OAS risk. It includes the key retirement strategies offered at Retirement Club.
What is Retirement Club for Canadians?
Protecting your Old Age Security
- You might join CARP, The Canadian Association of Retired Persons – Old Age Security: a lifeline under threat.
- Vote accordingly. Know the position of political parties on the federal and provincial levels.
- Stay involved and stay aware. Share your findings with editorial boards, journalists, politicians, on social media and with friends and family. This will be a communications / public opinion battle.
Another week of war and uncertainty
And here’s the performance of equity markets since the beginning or the war in Iran.
International developed markets (XEF-T) are down by 8.0% for the period. Developing markets are down by 9.0%. The Canadian bond market is also down 2.5%. As Cut The Crap Investing readers have know for quite some time – bonds don’t like inflation. We might choose to hedge that risk within the balanced portfolio.
Here’s how we protect against high inflation and stagflation.
Inflation fighters (PRA-T) had a good week, up 2.5%. Canadian oil and gas (XEG-T) was up 5.6% as energy leads the charge. XEG is up 14.15% over the last month.
Here’s an example of an all-weather portfolio at work, my wife’s Canadian Dollar RRSP. One month period …
The RRSP portfolio is in Green, the TSX Composite in blue, the S&P 500 in red.
- RRSP up 12.06%
- TSX up 0.49%
- S&P 500 down 6.46%
The portfolio has a defensive tilt while offering inflation protection. You can join Retirement Club if you’re interested in how to build the Retirement Portfolio that includes defensive equities, and protects from inflation and energy shocks. It’s not advice, but an idea for consideration.
The Sunday Reads and Watch
At Findependence Hub, via BMO ETFs – Retirement is getting longer, your portfolio should be too.
At MoneySense Retirement Clubber Jonathan Chevreau wonders how retirees should respond to the Iran crisis.
Let’s take a look at Dividend Hawk’s portfolio activity and news for the week.
Dan at Stocktrades has his eye on these two Canadian blue chips.
Bob at Tawcan delivers his February 2026 portfolio review.
And Rhys at Well Build Wealth shows you how to figure out how much you need to retire.
GenyMoney looks at a very important topic and skill – The Art of Spending Money, from Morgan Housel the author of the Psychology of Money.
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For February we received $44.46 in cash from everyday spending. You can select 3 categories for 2.0% cash back. Remaining categories pay up at 0.50%.
That cash went into my TFSA account to help buy some CBIL-T, CHPS-T, HURA-T and bitcoin. I always top up the cashback dollars and make a few investments.
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Hi Dale
Very disappointed to see your criticism of Generation Squeeze. Very reactionary and inflammatory. Most retired people have kids and grandkids. We see them struggle. That is why we see introducing income based fairness to OAS as a positive step , both for lower income seniors and young families. I would encourage your readers to go to the generation squeeze website and check it out for themselves.
Hi Douglas quite the opposite. Readers were very responsive and appreciated the awareness. It’s a misleading poll and press release.
I simply reported the truths /facts.
And some readers did go to the Squeeze site. They came to this conclusion.
“I checked into Generation Squeeze and they are an advocacy group for young Canadians. What are they doing taking small polls regarding OAS other than to divert money to their age group. The CARP article was to the point.”
It’s obvious what’s going on. Seniors and GenX’ers can fight back with the truth. But there’s no guarantee that truth and honesty will win.
Dale , thank you for the post. I fully agree with you and the same person/organization has been writing about this topic for a while now and it is clear now that there are “forces” behind the scenes pushing the agenda. It is actually sad if the government of a G7 nation goes after $700 per month payment for those of have paid taxes for 40 years and are now seniors or will be seniors down the road. Generation squeeze if they are true will actually be seniors one day and then will cry that the Canadian pension system does not support seniors enough.
It seems to me that reducing OAS for anyone above a certain income level makes totally sense. In fact it should even be redistributed to those that are retired and living below a certain annual income. Anyone retired and pulling in over $130,000 do not need OAS. It’s time to cut out the overly wealthy ones that seem to always
“cry me a river”.
Would they do a sensible trim of OAS at the top end? Who knows? Likely not. And once they start, where do they stop? We see the government working with this propaganda (the poll is a farce) and they are likely showing their true colours by putting tax credits and investment treatment on the table. We know how government works. And they will be desperate due to mismanagement.
It seems quite obvious as to what is going on. IMHO.
I feel confident that most Canadians do not fully understand how Revenue Canada calculates the thresholds governing the clawback of Old Age Security, and of course, Generation Squeeze fails to explain this as well. However this misunderstanding is quite understandable due to the complexity of the Income Tax Act. Generation Squeeze prefers to cite extreme cases in their effort to convince folks of the validity of their crusade. In reality, Revenue Canada uses the line 23400 (Net Income) for purposes of calculating the clawback. This line includes the dividends from Canadian Corporations, and the actual dividend income is multiplied by 38%,resulting in what amounts to a phantom figure for the Net Income. For example, if actual dividend income from Canadian Corporations is say $ 20,000, the Rev Can calculation would count the net income for these dividends as $ 27,600 for the Net Income line, with $ 7,600 being phantom income that was never received. When you consider that the clawback of OAS begins at $ 93,454 for tax year 2025, if a person in the example above had an income of $ 93,454, the clawback would actually start at $ 93,454 minus the phantom figure of $ 7,600 resulting in clawback starting at $ 85,854 of actual income. Guess what, I don’t have the figures, but I would guess that a large number of OAS recipients that have net income above $ 93,000 do have the type of Canadian dividend income from ownership in stocks, ETF’s and mutual funds, thus involving the phantom calculation of Net Income. I also do not have info on what the average dividend income amounts that OAS recipients have, but that would be relevant to know, but Generation Squeeze does not provide numbers either as far as their claim of couples with the $ 180,000 income level not having any OAS clawback.
Granted the seemingly bizarre calculation is used by Rev Can to calculate a tax credit to offset double taxation of dividends by Canadian corporations and individuals, but to use the Net Income in this fashion does directly affect the threshold calculation of the OAS clawback. Let’s not forget that OAS income is also taxable and, as income increases, so too does the percentage of taxation on these monies.
In addition, I am not an authority by any means when it comes to the validity of surveys, but when you look at the survey taken by Generation Squeeze, it does appear that the questions are posed in a manner to elicit a response that is favourable to their cause. I whole heartedly believe Generation Squeeze should put forth their views, but the repetition of their views, in the various media, while glossing over some of the relevant issues involved, seems to me, to be misleading, with a view to tailoring the arguments to support the Generation Squeeze opinion. I would like to see more stats on this subject, and more opinions based on the actual stats, rather than the same opinion, using the same info, repeated over and over again. Yes broad conversations need to take place on the challenges faced by this generation or that generation, as has always been the case, but I am not convinced that tinkering with OAS is the answer or even the start. There are more calls for a complete overhaul of the Income Tax Act.