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Textes d'opinion

Old age not what it used to be

Could we be living up to 150 years in a not-too-distant future? It sounds like science fiction, but there is a whole field of serious research called "life extension science" devoted to finding ways to make us live longer, much longer.

Who can doubt that if it were to happen tomorrow, we would need to entirely rethink the way we manage our lives, including pension programs?

Actually, changes in our life expectancy have already happened, although to a more modest extent, in the past couple of decades. In 1966, men who had reached the age of 65 could expect to live another 14 years. Today, it's 18 years (or an average life expectancy of 83 years). For women, the respective numbers are 17 and 21 years (for an average life expectancy of 86).

It may not seem like a lot, but that four-year extension adds up to a lot more pension cheques for senior citizens every month. The more so as the number of such seniors increases from about 4.7 million now to an expected 9.3 million in 2030, when the last baby boomers will have reached retirement age. And that's not even accounting for the increased life expectancy that will likely occur in the meantime, whether or not a miraculous anti-aging pill has been developed.

In that context, the Conservative government's intention to increase the qualifying age for the Old Age Security program is to be commended. When the program was set up in the early 1950s, our grandparents and great grandparents had much more physically demanding jobs, could not expect to live much older than 75, and were much more likely to live in poverty.

Thankfully, all this has changed, and social programs should be adapted to reflect this new reality. The key when you make such policy changes is to give citizens plenty of time to prepare.

Canada is likely to follow the example of other industrialized countries that have reformed their pension programs and implemented the change over a rather long period.

For example, in Germany, where the population is among the most rapidly aging in the world, they have begun postponing the qualifying age for pensions by one month every year, to be increased to two months later. By 2030, all Germans will get their pension cheques at 67.

Australia has adopted a faster process. The qualifying age will increase by six months every two years starting in 2017, so that it will have reached 67 by 2023.

The process is a bit more complicated in the UK but will go further than anywhere else over a longer period. The state pension age will be increased to 66 between 2018 and 2020; to 67 between 2026 and 2028; and to 68 between 2044 and 2046.

It's understandable that Canadians close to retirement age today will be concerned about their financial security in expectations of that change. But they probably won't be affected at all, although we can expect that there will be no shortage of demagogic declarations to stoke that fear and oppose any reform.

It's people of my generation – I recently turned 40 – who will be truly affected by those changes. Sure, the labour market will have to adapt itself by becoming more flexible, and governments will have to review some of their policies in order to facilitate this adaptation. But the basic reality is that we will live longer and we will have to work longer. That's just basic common sense.

Michel Kelly-Gagnon est président et directeur général de l'Institut économique de Montréal.
* Cette chronique est publiée dans les journaux de Sun Media, tant dans ses quotidiens présents dans plusieurs des marchés urbains canadiens les plus importants (Toronto, Ottawa, Calgary, Edmonton, Winnipeg et London) que dans ses 28 quotidiens régionaux
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