It is not a question of if: Canada will, eventually, raise the age at which people are entitled to claim Guaranteed Income Supplement and Old Age Security. The US is raising its full retirement age, the UK is raising its state pension age.
We'll raise our pension age for the same reason that they raised theirs: it saves money, and it has little political cost.
Think about it: if Stephen Harper was to announce tomorrow that the age at which people will be entitled to claim Old Age Security was going to increase to 67 in the year 2025, who would protest?
Not the over 50s: they'll still be able to start claiming at 65 as planned.
Not the under 50s, either. People discount the future. For someone with a 10 percent discount rate, a $5,000 Old Age Security payment received in, say, 17 years time has a present value of under $1,000. That's not worth fighting for.
Political opposition to raising the entitlement age is further muted by the fact that those with incomes above $66,335 annually must repay all or part of their Old Age Security pension, and recent immigrants do not receive OAS benefits. These groups have no reason to protest.
As Kevin Milligan has argued, increasing the age at which people are entitled to receive Old Age Security and Guaranteed Income Supplement won't produce huge savings. But it's not the absolute savings that matter, it's the savings relative to the political cost incurred - and for an increase in the pension age, those political costs will be minimal.
So the question is not if the pension age will be increased, but when. 1959 was the year with the highest number of births ever recorded in Canada 461,703 babies. After that, the number of births fell slightly, and then dropped precipitously with the advent of the birth control pill. (Immigration reduces the relative impact of, but does not eliminate, the baby boom bulge.)
For an increase in the entitlement age to achieve substantial cost savings, it will have to be in place when those 1959 babies hit 65 in 2024.
So I'm predicting that the entitlement age will gradually be increased, in 6 month increments, with a new entitlement age of 67 in place by 2023.