In a scathing report released Monday, Canada’s auditor general slammed the federal government for failing to track the effectiveness of federal benefits for seniors.
There are nearly 20 federal departments and agencies that support seniors, the report says. Employment and Social Development Canada is the department tasked with supporting the Minister of Seniors.
“We found that Employment and Social Development Canada’s work was not sufficient to enable it to help the government understand seniors’ needs and ensure that programs were in place to address them,” the report says.
“The department collected information and data about seniors, but it did not analyze it.”
Despite spending billions of dollars each year on income assistance for seniors, six per cent remain in poverty. The report recommends the government determine whether current benefits for seniors meet their needs.
Seniors’ advocates and policy experts say developing proper tools to measure seniors’ financial needs is difficult, but that the existence of such tools would be helpful.
“This government doesn’t really know how to tackle our aging population, despite the fact that it is one of the most pressing issues that there is,” said Laura Tamblyn Watts, CEO of CanAge, a national seniors’ advocacy organization. “This is just a reiteration of previous reports with no change.”
Most costly program
Much of the auditor general’s report focused on Old Age Security, a monthly financial benefit for seniors.
The monthly Old Age Security payment for seniors between 65- and 74-years-old was a maximum of $718 in summer 2024. The maximum for seniors 75 and older was $790. Annual increases in both amounts are indexed to inflation.
The government failed to properly assess this program to make sure it met its goals, the report says.
Low-income seniors receive additional money through the Guaranteed Income Supplement. Combined, these programs are the largest government program in Canada. The government spent $60.6 billion on these programs in 2020. These programs are projected to cost $276.5 billion in 2060, up from a projected $88 billion in 2025.
“Measuring the results of these programs is critical for the department to know whether results are improving as expected,” the report says.
In mandate letters in 2015, 2016 and 2018, Prime Minister Justin Trudeau told ministers responsible for seniors’ benefits to create an inflation rate specific for seniors. That has not happened.
“[Employment and Social Development Canada] did not clearly define how it would measure program outcomes or how it would know whether the Old Age Security program was successfully supporting seniors’ financial security,” the auditor general found.
The government will “strengthen its analysis on how the [Old Age Security] program is performing in the context of the different pillars of the Canadian retirement income system,” Minister of Seniors Steven MacKinnon said in a public statement responding to the report.
Statistics Canada and Employment and Social Development Canada have developed a new model to help determine how changes to Old Age Security could impact seniors with different incomes or in different demographics. The model should be ready for use by March 2026, the report says.
Defining seniors’ poverty
Canada’s official poverty line is determined by the market basket measure. This measure is based on how much a family of four spends on goods like food, clothing, shelter and transportation. It varies across the country, depending on location.
By this measure, most seniors are not living in poverty, says Alexi White from the Maytree Foundation, a research organization focused on eliminating poverty.
“Of all the age groups, they’re facing the lowest amounts of poverty,” White said. This is partly because of Old Age Security and the Guaranteed Income Supplement. “There’s just nothing like them for other age groups in the country,” he said.
However, the market basket measure does not account for how seniors spend their money differently, says White.
Many seniors live below the low-income measure, defined as half of the median income. “There are a lot of people who are seniors who are living just above the official poverty line,” White said.
A report released Wednesday by Statistics Canada describes this trend.
“On the one hand, older persons in Canada are better off than in the past, in terms of their income level,” the report says. “But, on the other hand, their income has not increased as quickly as the income of the working-age population.”
The Maytree Foundadtion has argued for a poverty line specifically for seniors.
Tamblyn Watts says there is “no question” a new market basket measure for seniors is needed. The current market basket measure does not consider caregiving costs or medical needs many seniors have. Canada also needs a national caregiving strategy, she says.
“It’s not a gray tsunami or a silver tsunami,” she said of Canada’s rapidly aging population. “It’s a rising tide, and it’s not going to go down.”
John Stapleton, a social policy analyst and fellow at the National Institute on Ageing, says government assistance programs need to have clear goals.
“Figure out what you’re trying to do,” he said. “Are you trying to keep people out of poverty? Are you trying to make them less unequal?”
If the goal is keeping seniors out of poverty, the federal government is doing a pretty good job, he says. But if the goal is reducing inequality between seniors and non-seniors, then there needs to be a new formula for determining seniors’ benefits.
White says that all ways of measuring poverty are based on ideal situations, and cannot accurately reflect everyone’s situation.
Creating a measure to determine poverty specifically for seniors is “an important exercise,” he said. “But if it distracts in any way from actually raising more seniors up to living in dignity, then we’ve gone astray.”
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