Alberta PC's way out front

[Makarov]

Originally Posted by Slava

Those exact stories happen in the private sector as well.

Indeed. I love it when people believe that the inefficiencies of large organizations is the exclusive domain of government. Clearly these people have never worked for any type of large organization.

[MarchHare]

Originally Posted by SeeBass

I just love the stance of "I only like to pay for what I like"

My other favourite one is "I know how to spend my money better than the government does."

[Slava]

Originally Posted by MarchHare

My other favourite one is "I know how to spend my money better than the government does."

Then they'll be up in arms when OAS is disbanded!

[Azure]

Originally Posted by Makarov

Indeed. I love it when people believe that the inefficiencies of large organizations is the exclusive domain of government. Clearly these people have never worked for any type of large organization.

Companies usually need to turn a profit the majority of the time in order to stay afloat. Governments don't, and as a result sometimes they don't really care how efficiently they spend their money, or how balanced their budget is.

Taxes are necessary. Government spending is necessary. But, the government has to try as much as possible to spend only what they take it, and do it as efficiently as possible.

If you keep your deficit-GDP ratio around 1-2%, which IIRC is what Canada is at right now, you're doing pretty good.

[Azure]

Originally Posted by Slava

Then they'll be up in arms when OAS is disbanded!

OAS won't be disbanded. It will be reformed. Like it needs to be.

Of course that won't stop a lot of freeloaders from bitching about it. Free handouts for everyone! Even if we spend ourselves into the hole.

[Slava]

Originally Posted by Azure

OAS won't be disbanded. It will be reformed. Like it needs to be.

Of course that won't stop a lot of freeloaders from bitching about it. Free handouts for everyone! Even if we spend ourselves into the hole.

Ya, its probably just my opinion that it should be drastically scaled back, or potentially eliminated. I know that is politically suicidal, but when you look at the numbers its probably sensible. At the very least though it needs drastic reform. Anyway, topic for another discussion.

[GP_Matt]

I don't deny that there are inefficiencies in the market. The difference is the consequences. In the private sector there is competition so an inefficient company will lose market share or see their share price decline.
I will admit though that I do not work for a large organization so maybe it is just as bad or worse.

[Makarov]

Originally Posted by GP_Matt

I don't deny that there are inefficiencies in the market. The difference is the consequences. In the private sector there is competition so an inefficient company will lose market share or see their share price decline.
I will admit though that I do not work for a large organization so maybe it is just as bad or worse.

There are consequences for government too. The most obvious of which is of course defeat at the ballot box.

Its worth noting too that the level of oversight over government efficiency, especially as provided by the media, is far greater than the level of oversight over private sector efficiency. For example, would anyone like to imagine the media uproar if senior government officials recieved the sort of annual bonuses that financial sector workers recieve?

[GP_Matt]

Scaling back OAS would be tough to swallow for people at or near retirement as they don't have a lot of options at that point. I did like the idea with CPP to raise the retirement age to collect full benefits.
I was starting to write a post stating that it made sense to raise the age as lifespan increased, but upon looking for the data to support the position I found that the retirement age started out at 70 and was lowered in 1987.

[darklord700]

Originally Posted by Azure

OAS won't be disbanded. It will be reformed. Like it needs to be.

http://worthwhile.typepad.com/worthw...-security.html

I support disbanding OAS and replace it with an income and asset tested system. In particular, there must be a reform to curb new senior immigrants benefits. I know for fact that many well to do families sponsor their parents here and after ten years, the parents can collect OAS and GIS to the tune of $1000 per person a month. Aren't we just nice as a country to give free money to people?

Harper is doing the right thing, we can't keep giving money away but raising the OAS age limit by 2 years does very little to solve the problem. People are aging and we aren't as rich as we once were. But the problem with being a welfare state is that once you started paying people, it's hard to change course even if changing course is the right thing to do.

[Slava]

OAS is already income tested....

[GP_Matt]

Originally Posted by darklord700

Harper is doing the right thing, we can't keep giving money away but raising the OAS age limit by 2 years does very little to solve the problem. People are aging and we aren't as rich as we once were. But the problem with being a welfare state is that once you started paying people, it's hard to change course even if changing course is the right thing to do.

I could be wrong, but I think we are richer than we ever were.

[Makarov]

Originally Posted by darklord700

http://worthwhile.typepad.com/worthw...-security.html

I support disbanding OAS and replace it with an income and asset tested system. In particular, there must be a reform to curb new senior immigrants benefits. I know for fact that many well to do families sponsor their parents here and after ten years, the parents can collect OAS and GIS to the tune of $1000 per person a month. Aren't we just nice as a country to give free money to people?

Thankfully, s. 15 of the Charter makes this kind of legislation unconstitutional. It is not possible to have two classes (based on birthplace) of Canadian citizen. So, we have a choice: either permit family class immigration for seniors or don't. If we choose not to, this would likely make all other types of immigration far less attractive (including the economic class of immigration, the one where we let China and India etc. train a bunch of lawyers, doctors, engineers and business people, at zero cost to Canada, and then invite them to come here and contribue to our society rather than the one they grew up in) to potential immigrants.

[darklord700]

Originally Posted by Makarov

Thankfully, s. 15 of the Charter makes this kind of legislation unconstitutional. It is not possible to have two classes (based on birthplace) of Canadian citizen.

We do pro-rate new immigrants OAS so we are segregating two classes of citizens for OAS purposes. The problem is whatever lower OAS the new immigrant losses, they make it up in GIS which is not pro-rated. So they are getting around $1K a month regardless.

[darklord700]

Originally Posted by Slava

OAS is already income tested....

But not asset tested. A couple who are 65 years old with $2M RRSP could still collect full OAS and GIS if they don't draw from their RRSP (they only need to draw from the RRSP from the age of 71).

Two full OAS and GIS would give this couple about $24K to live with. If that's not enough, they can draw from TFSA. They can also borrow from the banks to fund any remaining cash deficits. As long as the interest is less than the $24K OAS and GIS amount, this couple with $2M RRSP would come out ahead until they turn 71.

Making OAS and GIS asset tested benefits would help eliminate this.

[Slava]

Originally Posted by darklord700

But not asset tested. A couple who are 65 years old with $2M RRSP could still collect full OAS and GIS if they don't draw from their RRSP (they only need to draw from the RRSP from the age of 71).

Two full OAS and GIS would give this couple about $24K to live with. If that's not enough, they can draw from TFSA. They can also borrow from the banks to fund any remaining cash deficits. As long as the interest is less than the $24K OAS and GIS amount, this couple with $2M RRSP would come out ahead until they turn 71.

Making OAS and GIS asset tested benefits would help eliminate this.

How often is this actually happening though? As a professional in the field I'm going to say virtually never. Who is sitting with a $2M RRSP and decides instead to subside on $24k/yr plus TFSA's (which at most have $40k as of this year)? Basing your entire system on this type of thing is just not sensible.

[darklord700]

Originally Posted by Slava

How often is this actually happening though? As a professional in the field I'm going to say virtually never. Who is sitting with a $2M RRSP and decides instead to subside on $24k/yr plus TFSA's (which at most have $40k as of this year)? Basing your entire system on this type of thing is just not sensible.

Maybe $2M is a bit extreme. How about a $750K RRSP? I would do exactly that. At 65, your house and kids are paid off and you don't save for retirement so $40 K should be enough for a lot of senior couples to live on. The median family income is only $50K before tax which is less than $40K net of tax.

If you do need an extra $20K, borrow it from the bank at this interest rate the interest will be less than $1000 per year, far less than the $24K OAS and GIS benefits you are entitled to.

[Makarov]

Originally Posted by darklord700

We do pro-rate new immigrants OAS so we are segregating two classes of citizens for OAS purposes. The problem is whatever lower OAS the new immigrant losses, they make it up in GIS which is not pro-rated. So they are getting around $1K a month regardless.

Do we? I didn't realize. You seem to have more expertise on OAS than I do. Any chance you're able to point me towards the legislative provisions where this process of pro-rating is set out?

[transplant99]

Originally Posted by MarchHare

My other favourite one is "I know how to spend my money better than the government does."

Well i can tell you unequivocally that i certainly believe that i know how to spend my money better than any government that has ever existed.

In fact i have a hard time believing there are many people that dont.

[darklord700]

Originally Posted by Makarov

Do we? I didn't realize

http://www.servicecanada.gc.ca/eng/i.../oas/oas.shtml

"A partial pension is calculated at the rate of 1/40th of the full pension for each complete year of residence in Canada since age 18.

The minimum period you need to qualify for a partial pension is 10 years of residence in Canada after reaching age 18 (as long as you live in Canada when you receive your OAS pension). In other words, if you lived in Canada for 10 years after your 18th birthday, you may qualify to receive 10/40ths or one-quarter of the full Old Age Security pension."


The problem is while your OAS could be pro-rated but what you lose in the pro-rated OAS, you make up by getting more GIS so I don't know what's the point of this pro-ration. Assuming you have zero income, you still get about $1K OAS + GIS as long as you lived here for more than 10 years.