Family income for seniors has grown at double the pace of younger families since 1976, says Statistics Canada. The new research followed data that Canadians over 65 typically have more wealth and less debt than younger people.
“The wealthiest cohort in Canada are seniors – empirically, statistically and factually,” said Prof. Ian Lee, an economist with Carleton University’s Sprott School of Business. “This is not a theory or opinion. This is hard data.”
StatsCan in a report Seniors’ Income From 1976 To 2014 concluded median income for senior households over the period grew 67 percent, from $32,700 to $54,500 a year. Median income for younger families grew 31 percent over the four decades, from $62,500 to $82,100.
“The income of families whose major income earner was 65 years or older rose steadily from 1976 to 2014,” said Seniors’ Income. “However, this was not the case for the income of younger families.”
Prof. Lee said the figures raise questions over cabinet’s proposal for a 20 percent increase in mandatory Canada Pension Plan premiums to fund an increase in seniors’ benefits. “This idea that we have a serious pension crisis in Canada is nonsense,” said Lee.
Data show about 2 percent of senior families live below the poverty line. The rate is higher for single Canadians over 65.
“It’s obscene that the Government of Canada gives me a pension and Old Age Security cheque,” said Lee. “I make too much money. What I argue is folding Old Age Security into the Guaranteed Income Supplement, make qualifications means-tested, and give it to those who need it.”
Cabinet has said an expanded Canada Pension Plan is necessary. “From a poverty reduction perspective, this enhancement is good news,” Employment Minister Jean-Yves Duclos earlier told the Commons human resources committee; “If the enhancement were fully in place right now, the number of Canadian families at risk of not saving enough for retirement would be reduced.”
StatsCan in an earlier report Survey Of Financial Security 2012 noted while Canadians over 65 typically have less cash income, they have higher net worth with mortgage-free homes – $246,000 on average, compared to net worth of $23,000 for younger singles. Pensioners’ debts average 4 percent of equity, compared to 26 percent for single parents at work, and 24 percent for couples with children.
Some 59 percent of Canadian seniors own their own homes, by Department of Finance estimate. Younger Canadians by comparison carry $28.3 billion in student loan debt; $33.2 billion in consumer credit debt; and $1 trillion in mortgage debt, Financial Security said.
By Jason Unrau