Number of OAS beneficiaries expected to jump

It also makes the following predictions:

• OAS basic pension annual expenditures are projected to increase from $33 billion in 2013 to $74 billion in 2030 and $144 billion by 2050;
• the number of Guaranteed Income Supplement (GIS) and Allowance beneficiaries is expected to increase by 60% within the next two decades, growing from 1.8 million in 2013 to 2.9 million by 2030;
• the GIS recipient rate is projected to slowly increase from its current level of 32% to 34% by 2030, due to the impact of tax-free savings accounts (TFSAs); the GIS recipient rate is subsequently projected to reduce to 31% by 2050;
• GIS annual expenditures are projected to increase from $9 billion in 2013 to $20 billion in 2030 and $36 billion by 2050;
• total annual expenditures are projected to increase from $43 billion in 2013 to $96 billion in 2030 and $181 billion by 2050;
• the ratio of expenditures to the GDP is projected to be 2.3% in 2013, which is similar to what the ratio was in 1980; after 2013, the ratio is projected to reach a high of 2.8% in 2033—this level is somewhat higher than the historical peak of 2.7% reached in the early 1990s; and
• after 2033, the ratio of expenditures to GDP is projected to slowly decrease to a level of 2.4% by 2050; this reduction is attributable to expected slower growth in inflation compared to growth in wages and the GDP.

In comparison with the previous triennial actuarial report, the assumed continuing increases in longevity, especially at older ages, lead to increases in the cost ratio. However, this effect is countered by assumed increases in net migration, leading to no effect on the projected cost ratios from the demographic assumptions.

Although the anticipated effect of TFSAs and changes in economic assumptions act to increase the cost ratios, these effects are more than offset by other factors, including the experience of the last three years and recent legislated amendments to the program, which will gradually increase the age for benefit eligibility. The net result is lower expenditures relative to the GDP over the projection period.

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