A major shift could soon reshape Canada’s retirement landscape. The federal government is reportedly reviewing plans to raise the Old Age Security (OAS) eligibility age from 65 to 67, reigniting a long-standing national debate about fairness, fiscal responsibility, and generational equity.
If implemented, this change would directly affect millions of Canadians approaching retirement in the next decade. The move is part of a broader discussion about the long-term sustainability of Canada’s pension system, as the population ages and program costs continue to climb.
Here’s what Canadians need to know about the potential OAS age increase, why the government is considering it, and how it could impact retirement planning in 2025 and beyond.
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Why the Government Is Considering Raising the OAS Age
The Old Age Security program is one of the largest federal expenditures, costing more than $80 billion annually. The Parliamentary Budget Officer (PBO) and other fiscal experts have warned that OAS spending could become unsustainable by the mid-2030s if no structural changes are made.
With life expectancy rising and more Canadians retiring than ever before, the government faces a difficult balancing act: maintaining benefits for seniors while ensuring the system remains viable for future generations.
By gradually increasing the eligibility age for OAS from 65 to 67, Ottawa could potentially save billions of dollars over the next decade — funds that could be redirected toward healthcare, housing, and younger generations struggling with affordability.
Historical Context – This Isn’t the First Time
The idea of raising the OAS age isn’t new. In 2012, then-Prime Minister Stephen Harper’s government announced a plan to gradually increase the eligibility age from 65 to 67, set to take effect between 2023 and 2029.
However, in 2016, the Trudeau government reversed the decision, restoring the eligibility age to 65, citing concerns about fairness to low-income seniors who rely heavily on OAS.
Now, with Prime Minister Mark Carney’s government facing ballooning deficits and an aging population, the proposal appears to be back on the table — with renewed urgency.
What Changing the OAS Age to 67 Would Mean
If approved, this change would not affect current seniors already receiving OAS benefits. Instead, it would apply to younger Canadians who have not yet reached retirement age.
Here’s what the proposed shift could mean:
- Gradual Implementation: The eligibility age could rise by two months each year, meaning those turning 65 in 2030 or later might have to wait until 67 to collect OAS.
- No Impact on Existing Beneficiaries: Anyone already receiving OAS or turning 65 before the transition date would remain unaffected.
- Possible Adjustment to CPP: While CPP (Canada Pension Plan) is separate from OAS, both programs work together. A later OAS start date could encourage Canadians to delay CPP as well.
- Longer Working Years: Canadians may need to remain in the workforce longer to bridge the income gap before benefits begin.
This change could particularly affect low-income and physically demanding job workers, who may find it difficult to continue working into their late sixties.
Key Arguments in Favour of the Change
Supporters of the proposal argue that the shift to age 67 reflects modern demographic realities:
- People Are Living Longer: Canadians live, on average, into their early 80s. Many will now spend nearly 20 years collecting retirement benefits.
- Fiscal Sustainability: Raising the OAS age could save billions in federal spending annually, helping stabilize public finances.
- Fairness Between Generations: Younger Canadians face rising costs for housing and education while supporting an aging population through taxes. Adjusting eligibility helps balance the system.
Economist Paul Kershaw, founder of Generation Squeeze, has argued that the OAS program has drifted away from its purpose of protecting vulnerable seniors, saying, “Helping poor retirees is a duty. Subsidizing affluence is a waste.”
Criticism and Concerns from Seniors’ Advocates
Not everyone agrees with the proposed change. Seniors’ advocacy groups warn that increasing the OAS eligibility age would disproportionately hurt low-income Canadians who rely on early retirement benefits to survive.
Key concerns include:
- Increased Poverty Risk: Seniors unable to work longer may face financial hardship before qualifying for OAS.
- Regional Inequities: Canadians in physically demanding jobs, such as construction or caregiving, may not be able to extend their working years.
- Health and Longevity Gaps: Lower-income Canadians have shorter life expectancies, meaning they could receive fewer years of benefits.
The Canadian Association of Retired Persons (CARP) has called on the government to protect vulnerable seniors from policy shifts that would delay essential income support.
How the Change Could Impact Your Retirement Planning
If the OAS age increase takes effect, future retirees will need to make significant adjustments to their financial and retirement plans.
Key strategies include:
- Increase RRSP and TFSA Contributions: Build a larger personal savings buffer to cover the two-year gap before OAS begins.
- Delay CPP Payments: By waiting until age 67 or later, you can increase your monthly CPP payout by up to 42%.
- Employer Pension Optimization: Explore early retirement incentives or phased retirement options through your employer.
- Consider Part-Time Work or Consulting: Many Canadians may choose to stay semi-retired, maintaining part-time income while waiting for benefits.
Proper financial planning will be critical for Canadians in their 40s and 50s who could be directly impacted by this policy shift.
What Happens Next
The Carney government is expected to review OAS sustainability measures as part of the November 2025 federal budget. If the eligibility change is included, it will likely come with a phased implementation timeline, giving Canadians several years to prepare.
Public consultations are also expected, allowing Canadians to voice concerns and suggestions regarding how the system can be made more equitable.
The potential move to raise the OAS eligibility age to 67 marks a defining moment for Canada’s retirement system. While it could strengthen fiscal sustainability, it also raises tough questions about fairness and support for vulnerable seniors.
For Canadians nearing retirement, staying informed and planning ahead will be essential. Whether the policy takes effect or not, the message is clear: Canada’s retirement landscape is changing, and proactive preparation is the best defense against uncertainty.