The federal government quietly abandoned a campaign pledge to boost seniors’ pensions through a special inflation index after officials concluded the measure would deliver only modest increases while costing taxpayers hundreds of millions of dollars, newly released records show.Blacklock's Reporter said cabinet shelved plans to create a Seniors Price Index, a custom inflation measure the Liberal Party promised during the 2015 election campaign to help increase Old Age Security payments.According to a March 30 memorandum from the Department of Social Development, officials determined the financial burden of the proposal far outweighed the benefits recipients would receive.“Although indexation with a Seniors Price Index would have resulted in small individual benefit increases, the overall cost would have been high given that the indexation would have affected all Old Age Security beneficiaries,” the memo stated.Officials estimated the additional program cost would have reached $62.5 million in 2021 and climbed to $308.1 million by 2024, with expenses continuing to rise annually.The memorandum, disclosed through Access To Information and released yesterday, also warned that Statistics Canada would face significant operating expenses to maintain the new index.“In addition there would have been significant operating costs for Statistics Canada to continue the production of the Seniors Price Index,” officials wrote.The Liberals pledged the measure in their 2015 election platform, Real Change, promising to develop a new benchmark that would better reflect the cost of living experienced by seniors.“A Liberal government will ensure a secure retirement for Canadians by developing a new measure for the cost of living faced by seniors, the Seniors Price Index,” the platform said..The commitment stemmed from a 2005 Statistics Canada study suggesting seniors experienced slightly higher inflation than the general population. However, further analysis found the difference was negligible.According to the memorandum, a five-year review showed the Consumer Price Index increased 10.7% while a theoretical Seniors Price Index rose 11%, a gap that translated into no more than $25 annually for pension recipients.“This work led to the conclusion that the cost of living faced by seniors is similar to the cost of living faced by the general population,” the memo said.“Given that the indexation of Old Age Security benefits with a Seniors Price Index would have resulted in very small additional benefit increases for individuals at a high overall cost, the government decided not to pursue this commitment.”Canada is home to more than 7.7 million seniors. Old Age Security and related benefits are projected to cost taxpayers $89.3 billion this year, representing a 7.5% annual increase, according to the Parliamentary Budget Office report The Government Expenditure Plan And Main Estimates For 2026-2027 released May 8.Federal spending on seniors’ benefits is expected to exceed $100 billion annually within the next few years.“The government projects that by 2030 federal spending on elderly benefits will reach $108.5 billion,” budget analysts wrote.The report said growing costs are being driven by both inflation and Canada’s expanding senior population, with benefits automatically indexed to rising prices.
