Comedian Aamer Rahman once discussed the idea of “reverse racism” in his 2014 standup comedy routine. His point was not that reverse racism was impossible, but before he could plausibly stand on a stage and ask, “What’s with white people?”, a remarkable number of historical reversals would first have to take place.
White people would have needed to be excluded from jobs, housing, education, political power, wealth accumulation, and social influence for centuries. Only after all those reversals occurred would the question begin to make sense.
The joke works because the audience understands that the necessary conditions simply did not exist.
I find myself thinking about that routine whenever I read another proposal to lower the OAS clawback threshold in the name of intergenerational fairness.
To do list before we reduce OAS
I’m not saying OAS should never be reformed. I’m saying that before we start reducing retirement income security, an awful lot of other things would have to happen first.
For example, before I support lowering the OAS clawback threshold, I would like to see Canada address the fact that the largest sources of intergenerational advantage are increasingly wealth, not income.
I would like to see us discuss inheritance taxes, tax-free gains on principal residences and family trusts, preferred taxation on large intergenerational transfers of assets, and why Canada taxes income repeatedly but allows vast stores of accumulated wealth to move between generations with comparatively little scrutiny.
Then we can talk about OAS.
But before I would support lowering the OAS threshold, I would like to see long-term care costs properly reflected in the calculation of ability to pay. A retired couple earning $110,000 while spending tens of thousands of dollars annually on dementia care is not situated the same as a retired couple earning the same income with no extraordinary expenses.
The current clawback calculation does not adequately recognize that difference. Let’s fix that first.
But again, before I would support lowering the threshold, I would like to see medical expenses treated more fairly in determining OAS recovery.
And before I would support lowering the threshold, I would like to see charitable contributions treated at least as favourably as investment carrying charges in the definitions of the clawback threshold.
And once again before I would support lowering the threshold, I would like to see a serious discussion about why Canada is willing to asset-test welfare recipients and disability recipients but largely avoids discussing asset-testing among the affluent.
And also, before I support lowering the threshold, I would like to see a conversation about why a person can inherit a million-dollar home without triggering the same level of policy concern that accompanies a modest increase in OAS expenditures.
Would reducing OAS actually address intergenerational inequality?
But most importantly, before I support lowering the threshold, I would like to be even marginally convinced that doing so would actually address intergenerational inequality.
Because that is the part of the argument that remains elusive. If a senior loses part of their OAS but still passes substantial housing wealth and financial assets to the next generation, what exactly has changed?
The wealth remains.
The inheritance remains.
The advantage remains.
Only the income support has changed.
That is why I remain skeptical. Not because OAS is sacred. Not because reform is impossible.
But because so many of the conditions that would justify making OAS a central target have not yet been met.
Like Rahman’s joke, the issue is not whether the concept is theoretically possible. The issue is whether the necessary preconditions exist.
And when it comes to intergenerational inequality in Canada, we are still a very long way from the point we should be talking about lowering the OAS clawback threshold.