Pension changes likely in 2020-25: Flaherty

To involve more than one federal budget
||Last Updated: 02/17/2012

OTTAWA (Reuters) - Changes to Canada's Old Age Security pension program will likely come in 2020 or beyond and will involve more than one federal budget, according to Finance Minister Jim Flaherty.

"This is for 2020, 2025 so that people who are middle age and younger today... can be assured that they will have these social programs properly funded, fiscally responsible, that they'll be there for them in the future," said Flaherty, according to a transcript of comments in Oshawa, Ontario.

The remarks pinpoint more precisely the timing of proposed pension reforms that have caused a political firestorm in Ottawa for several days.

Prime Minister Stephen Harper has said Ottawa may need to limit the growth of spending on the pension program, one key pillar of the pension system, to address funding problems that will arise when baby boomers retire and the number of contributors in the workforce shrinks.

Harper, who said the current system is unsustainable, provided no details but one widely floated idea would raise the minimum age for receiving benefits to 67 from 65. Opposition parties accuse the government of punishing seniors while spending money on military aircraft and jails.

Harper and his cabinet ministers have said any changes will not affect current retirees, and will not come in the next budget, expected in late March or possibly later.

"The timing of what we do will involve more than one budget and we will… announce some steps forward, but we certainly need to plan ahead and this is not for tomorrow morning," said Flaherty.

Canada's Parliamentary Budget Officer Kevin Page released a report this week saying the Old Age Security system was sustainable in its current form.

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