From Debate to Implementation

Canada: Though the OAS age remains at 65, policymakers and fiscal agencies are again debating increases, with growing attention to whether indexing or gradual phase-ins will be necessary to maintain long-term sustainability. As I live in Canada I have some further information about our situation.

Recent Canadian Data & Projections Aging Population & Demographics

o    The cohort aged 85+ is one of the fastest growing. In 2021 the number was about 861,000, more than twice what it was in 2001. In projection scenarios, by 2074 that group could reach between 3.2 million (low growth) and 4.1 million (high growth). Statistics Canada

o    The ratio of working-age people (age 20-64) to those 65+ is declining. For example, in Canada (excluding Québec), it was about 3.8 working-age persons per person 65+ in 2016; projections show a drop toward 2.0 by 2075. OSFI

o    Old Age Security (OAS) & Guaranteed Income Supplement (GIS) Payments

o    Maximum OAS payments for ages 65-74 are around CA$727.67 per month as of early 2025; for those 75+ the amount is roughly CA$800.44/month. Government of Canada+2Morningstar

o    OAS payments are adjusted quarterly (January, April, July, October) based on CPI (Consumer Price Index). For example, in July-September 2025 the OAS payments were increased by about 1.0% over the previous quarter. actia.ca

o    GIS (“Guaranteed Income Supplement”) and Allowance thresholds and maximums are also in place to assist lower-income seniors; eligibility depends on previous year’s net world income, with thresholds above which payments are clawed back. Morningstar+2Government of Canada

CPP / Participation & Retirement Age Trends

• In actuarial reports, Canada’s pension (CPP) projections assume increasing labour force participation among older age groups. For example, the report projects the participation rate of people aged 18-69 to increase from ~ 75.9% (in 2018) to ~ 79.2% by 2035 under a “best estimate” scenario. OSFI
• Retirement benefit “take-up” ages (i.e. when people begin collecting the CPP retirement benefit) are assumed to remain roughly similar, though with some shift: for cohorts reaching age 60 in 2021 and thereafter, take-up at age 60 is assumed to be ~ 27.0% (males) / ~ 29.5% (females); take-up at age 65 is assumed ~ 46.4%. OSFI
• Projections show that under lower economic growth, costs of the OAS program expressed as a percentage of GDP rise over time; similarly, CPP costs will be higher with demographic shifts, especially as the population aged 65+ grows and the ratio of contributors to beneficiaries worsens. OSFI+2OSFI+2

Labour Constraints & Retirement Timing

• From the OSFI and related actuarial reports: average ages in certain defined benefit pension plan pools are creeping upward; “average age” of contributors in some plans has increased vs earlier years. For example, in the Public Service pension plan (as at 31 March 2023), average age of male contributors (main group) was ~ 50.9, up from ~ 49.6 in 2020; for females ~ 50.0 vs ~ 48.6. OSFI
• Also in the OAS actuarial report, there’s an assumption of “continued trend toward delayed retirement” for those aged 55+ in workforce participation