Auditor-General Karen Hogan is seen in a June 4 file photo.Sean Kilpatrick/The Canadian Press
The federal government doesn’t know whether the billions of dollars it spends each year on seniors benefits is meeting their needs, according to a new Auditor-General’s report, which points out that the annual cost of Old Age Security is on track to more than double over the next 20 years, to $181.2-billion in 2045, up from $88-billion in 2025.
With a federal election on the horizon, political parties have been hotly debating options to improve support for seniors, but Monday’s report shows that the main department responsible for such benefits does “not know” whether current federal programs are adequate.
“There’s very little analysis on the basic Old Age Security payment,” Auditor-General Karen Hogan told MPs on the public accounts committee shortly after tabling her report. “And we think a better analysis needs to be done in order to understand if this income support program, which is one of the largest programs for the federal government, is actually meeting the financial needs of seniors.”
The report on seniors benefits is one of five on different topics released Monday by Ms. Hogan.
Another report found that federal departments did not manage the Canada Emergency Business Account program “with due regard for value for money.” The pandemic-era program for small businesses provided $49.1-billion in loans and the report identifies a host of concerns with its federal oversight.
A chapter on the federal Industrial and Technological Benefits Policy also found Ottawa did a poor job of tracking results. That program requires winners of large defence procurement contracts to pledge the project will deliver economic benefits to Canada.
A chapter on the Canada Summer Jobs program found that young people who participated had better long-term outcomes, but it also expressed concern that people facing barriers to employment were under-represented. Another one flagged delays in an effort to replace almost 90 separate sign-in systems across the federal government with a single one for Canadians seeking online access to services.
The chapter on seniors focuses primarily on the Old Age Security program, which provides people aged 65 to 74 with up to $718 a month and those aged 75 and older with up to $790. The Bloc Québécois has urged the minority Liberal government to increase benefits for younger seniors to match the rates offered to their older counterparts. It has not committed to such a change.
Ms. Hogan’s report said current OAS levels are essentially tied to the program’s founding in 1952, when the benefit began with $40 a month. That was prior to the launch of the Canada Pension Plan.
The amount has increased over the years to grow in line with inflation. However, the report notes the Liberal government has been debating whether it should adopt a better formula for tracking inflation specifically focused on seniors. It points out that a 2015 directive led to briefings to the Seniors Minister between 2016 and 2018.
“In 2018, the Minister of Seniors decided to stop work on the consumer price index for seniors. Therefore, the department did not proceed to assess whether Old Age Security payments were keeping up with the inflation faced by seniors.”
The audit report also looked at federal programs aimed at funding projects to help seniors. It has backed 39,000 projects since 2004, worth a combined $850-million. However, the report found poor tracking of whether they delivered what was promised.
In a review of a sample of projects, auditors found 44 per cent of them raised concerns about Employment and Social Development Canada’s ability to demonstrate the value for money that was achieved.
In one example, $23,000 was approved to install an automatic door at a seniors residence. A government file noted the project had been delayed and the door had not yet been installed.
“However, the same file noted that the objective had been achieved, and the file was closed without any note that a follow-up was required.”
Steven MacKinnon, the Minister of Seniors, issued a statement Monday thanking Ms. Hogan for the report and pledging that the department will improve federal analysis of seniors benefits.
“To help ensure the program is still fit to financially support modern-day seniors and that it continues to play an essential role in reducing seniors’ poverty, [Employment and Social Development Canada] will strengthen its analysis on how the OAS program is performing in the context of the different pillars of the Canadian retirement income system,” he said.
A spokesperson for Mr. MacKinnon said the automatic door has since been installed.