Discounts and subsidies for seniors under more scrutiny than ever

Tom Hann says too many older people in St. John's, N.L., are struggling to get by.

That's why the city councillor, who also happens to be a senior citizen, thought it was a good idea to have the municipality lower the age limit for the discounts it offers seniors seeking bus passes or admission to pools and other recreational programs.

"If there's anything we can do to take some of the pressure off these people, then let's do it," he said in a recent interview, adding that the age limit should eventually be lowered to 55 from 65. "We have a lot of people living hand-to-mouth all the time."

Hann's well-meaning proposal was shot down with little debate. A staff report dismissed the idea, noting the cities of Vancouver, Edmonton and Moncton offer discounts only to those 65 and older — though two neighbouring Newfoundland municipalities have lower age limits.

Last week, council voted to keep the age limit where it is.

It was minor a setback for Hann, who plans to keep pushing for a broader discount. But there is evidence to suggest seniors across Canada are facing a quiet backlash against the expansion or retention of long-held entitlements once considered sacrosanct.

In 2014, the ferry service linking the islands off the West Coast eliminated a discount that allowed those 65 and older to ride for free.

In recent years, TD Bank came under fire for scaling back its seniors program. And some airlines have also cut back on discounts.

In 2015, a report for the Institute for Research on Public Policy concluded it was time for governments, particularly municipal governments, to stop offering price breaks for seniors.

"I don't think we should be providing special deals or perks to people simply based on their age," economist Harry Kitchen, the report's author, told Canadian Business. "You end up subsidizing some fairly wealthy people.”

In December of last year, there was talk of eliminating the discount offered to seniors who use public transit in Toronto, but Mayor John Tory quickly rejected the idea, saying the lower fares were for "people that have paid their dues."

Critics say discounts originally intended for low-income war veterans are now being gobbled up by a growing population of rich baby boomers with longer life expectancies.

Statistics Canada says nearly 30 per cent of seniors were considered poor in the mid-1970s. By 2007, that rate had fallen to 5.2 per cent, prompting suggestions most seniors were getting markdowns they didn't really need.

Paul Kershaw, a professor at the University of British Columbia, says Canada has succeeded in drastically reducing senior poverty, which should serve as an inspiration for policy-makers hoping to improve the lives of a more vulnerable group: young Canadians.

"Seniors report the lowest rates of low-income of any age group in the country," says Kershaw, founder of Generation Squeeze, an advocacy group pushing governments to do more to help millennials and young families struggling to deal with skyrocketing housing prices and lower incomes than their parents had.

"The logic back in the day, which presumed the older demographic was vulnerable, requires revisiting. We need a more nuanced approach."

Governments in Canada spend less than $12,000 on benefits and services per Canadian under 45, compared with more than $33,000 for every retiree, Kershaw's group has calculated.

The 2017 federal budget, tabled last month, projected an increase in seniors' benefits — from $48.3 billion this year to $63.7 billion five years from now — because of inflation and a growing number of Canadians eligible for old age security and the guaranteed income supplement.

As well, rapidly rising home prices have helped boost the net worth of senior families to roughly double that of families under 65, according to figures from Statistics Canada.

"We need to recognize that socio-economic vulnerability has actually shifted toward younger people," Kershaw says. "We can take inspiration from the success we've had at mitigating problems for seniors and repeat that for their kids and grandchildren."

However, more recent figures suggest seniors have been losing ground on the income front.

In February 2016, the Broadbent Institute released a study showing senior poverty — based on Statistics Canada's low-income measure — had increased from a low of 3.9 per cent in 1995 to 11.1 per cent in 2013. More importantly, the poverty rate for single women seniors had risen sharply to 28 per cent.

Wanda Morris, vice-president of advocacy for the Canadian Association of Retired Persons, said while it's true there are seniors who could live without discounts and government subsidies, there is a growing group that needs them.

Still, Morris says it doesn't make sense to simply offer more help to everyone over 55 or 65.

"The question is: How do we be nuanced in not subsidizing people who don't need it while still looking after those who are vulnerable?" said Morris. "Many (older Canadians) are at their peak earning level and are doing very well. The last thing they need is a subsidy. The answer is ... a nuanced approach."

As for lowering the age limit for seniors discounts, Morris said it's important to note that many Canadians under 65 have been pushed out of the workforce earlier than they expected for reasons beyond their control, such as health issues and restructuring.

In July 2015, the Angus Reid Institute released the results of a survey of 2,000 Canadians that found nearly half of retirees were forced into retirement earlier than they had planned — and more than one quarter were struggling to make ends meet.

"They're not looking for massive entitlements," Morris said, referring to the members of CARP. "A lot of them are concerned about poorer seniors ... We have to look at the services that are used disproportionately by poor people, and those that offer a health benefits, allowing us to save costs elsewhere."