Finances of the Nation: Federal and Provincial Income Support Programs for Seniors in Canada

Abstract

For almost 60 years, the Canadian Tax Foundation published an annual monograph, Finances of the Nation, and its predecessor, The National Finances. In a change of format, the 2014 Canadian Tax Journal introduced a new “Finances of the Nation” feature, which presents annual surveys of provincial and territorial budgets and topical articles on taxation and public expenditures in Canada. This article describes the main federal and provincial income support programs available to seniors in Canada. Key provisions of programs, differences in demographic characteristics, and differences in labour market experience are important for understanding differences in the receipt of benefits across and within provinces. The author constructs and uses synthetic work histories to illustrate differences in expected contributions and benefits under the enhanced Canada Pension Plan. The author also describes how components of federal and provincial programs that target support to low-income seniors drive high marginal effective tax rates, resulting in provincial differences in the rewards for continued work at older ages. The underlying data for the Finances of the Nation monographs and for the articles in this journal will be published online in the near future.

Keywords: Retirement, Pension Plans, Old Age Benefits, Senior Citizens