Federal benefits for seniors and children are projected to cost taxpayers $141.5 billion annually by 2030 as inflation and demographic pressures drive government spending higher, according to Parliamentary Budget Office figures.The Budget Office said spending on children's benefits alone has risen 16% over the past three years, climbing from $25 billion to $29.2 billion.“The Budget Office estimates 68% of this increase, equivalent to $2.8 billion, stems from the indexation of benefits which are adjusted each July 1 to Consumer Price Index inflation,” analysts wrote in Canada Child Benefit: Recent And Projected Growth.The report said declining purchasing power among some families receiving benefits also contributed to higher costs.“For many families, income did not keep pace with inflation during this period,” analysts wrote. “The Budget Office estimates the decline in real income for a subset of families receiving benefits explains an additional 25% of the increase in benefits.”Blacklock's Reporter said Ottawa introduced the tax-free Canada Child Benefit in 2016, the latest version of federal child benefit programs dating back to the Second World War.The benefit was initially credited with helping reduce Canada's poverty rate from 14.5% to 6.5% by 2020. The poverty rate has since risen to 11% amid higher food prices, according to Statistics Canada.“Total expenses for children’s benefits are projected to reach $33 billion by 2030,” the Budget Office said.Federal pensions and benefits for Canadians over age 65 are forecast to cost another $108.5 billion annually by 2030, according to an earlier Budget Office report, The Government Expenditure Plan And Main Estimates For 2026-2027.Combined, the two categories would cost $141.5 billion a year by the end of the decade.About 3.8 million families received the Canada Child Benefit last year under the program's income-testing rules.Parents earning less than $38,000 annually qualify for a maximum benefit of $8,157 a year for each child under age six and $6,882 for children aged six and older. Payments last year averaged $7,700 per child..No party represented in the House of Commons has proposed measures to reduce the cost of the benefits.Parliament passed legislation in 2012 that would have gradually raised the eligibility age for Old Age Security from 65 to 67. The change was forecast to save Ottawa $10.8 billion by 2029.The Liberal government reversed the measure after taking office in 2015, restoring the eligibility age to 65 in 2016.Then-senator Larry Smith of Quebec, who chaired the Senate national finance committee, warned legislators at the time about the long-term fiscal consequences.“This is all tied to debt growth,” Smith said. “This is particularly troubling as evidence shows Canadian citizens’ life expectancy has improved. This move goes against the demographic evidence.”Canada's population is also getting older. Seniors have outnumbered children since 2023, when there were approximately 7.66 million Canadians aged 65 and older compared with 7.47 million children.
