I understand the frustration that animates Paul Kershaw’s work. Younger Canadians face a housing market that feels rigged, tuition that rises faster than wages, and child-rearing costs that outpace family incomes. On the facts, Kershaw is right: many baby boomers had an easier run at owner-occupied housing and education than today’s young adults.
Where I part company is not with the diagnosis, but with the remedy—specifically, the call to end or curtail Old Age Security for senior couples with gross incomes around $180,000 and to redeploy those funds to younger adults, children, and lower-income seniors.
That approach borrows the romance of Robin Hood—take from the “rich” to help the poor—but it rests on a myopic reading of income, income taxation, and the risks we face in later life.
Here is my personal context.
I am part of a couple that almost receives full OAS but has a little bit clawed back —squarely within Kershaw’s and the Generation Squeeze target. On paper, that can look comfortable. In reality, our marginal effective tax rate would be north of 60 per cent once you combine income taxes with the OAS clawback and a modest additional RRIF withdrawal.
Every additional dollar we are forced to withdraw from our RRIFs loses more than sixty cents or more to the tax system at about $120,000 in individual income along with the 15% OAS clawback. . This is not a complaint about fairness in the abstract; it is a practical constraint on our capacity to manage risk.
We are mortgage-free. We carry no debt. Even so, we do not have the cash flow to bankroll a significant stay in a seniors’ residence or—far more consequential—round-the-clock care, not because we lack assets, but because the income tax system drains liquidity precisely when withdrawals are unavoidable.
Income tax is by far our largest annual expense – for the record – $34,900 in 2024. Home upkeep runs about $20,000 a year. Food and everything else is another $20,000. None of this is extravagant. It is simply the arithmetic of aging in Canada. And it shows just how significant income taxation can become when other expenses become more manageable – 47% of our yearly expenditures.
I learned how quickly this arithmetic can turn catastrophic from my own mother. In 2002, at age 99, she was told she would have to leave the Home where she lived unless she received 24-hour care assessed at $415,000 a year. That figure would have bankrupted her—and me—within four years. She died a month after the new assessment was made. At the time, she was still paying five-figures in income tax on her seniors’ benefits and RRIF income, all fully taxable. The lesson was searing: longevity risk and care risk are not hypotheticals; they are cliffs that are all too easy to fall off.
This is where Generation Squeeze’s proposals stumble. They argue using gross income and ignore marginal effective tax rates. Almost every dollar seniors receive—from OAS to CPP to RRIF withdrawals—is taxable. The interaction of taxes and clawbacks matters more than headline income. When policy looks only at gross income, it mistakes capacity for liquidity and resilience.
There is a second blind spot: the cost of living does not flatten in later life; it steepens. Independence tends to grow for young adults as careers advance and families stabilize. For seniors, dependence increases—often abruptly—through health events that require paid care. Those costs are not well socialized in Canada. They land on individuals and families, and they land late, when work income is gone and taxable withdrawals are compulsory.
Third, the generational flow of resources is mischaracterized. Transfers almost always move from old to young: help with education, down payments, childcare, and—eventually—inheritances. That does not solve today’s affordability crisis, but it does complicate the claim that public policy must reverse a one-way extraction from young to old. Families already do much of that redistribution privately.
None of this is to deny that boomers, as a cohort, did better than their adult children. It is to say that policy should not confuse cohort advantage with individual security at the margins. Removing OAS from couples as in our case “wouldn’t hurt me,” as some suggest. That misses the point. The point is what happens if I need 24-hour care in the future. Without OAS, my resources to pay for that care are depleted faster, not because I am reckless, but because the tax-withdrawal-care nexus is unforgiving.
There is a more nuanced path—one that the Council on Aging of Ottawa’s expert panel has long argued for. Start by measuring what actually matters: after-tax, after-clawback income and the marginal rates that govern behaviour.
Recognize care risk explicitly, and pool it more fairly through public insurance or capped out-of-pocket costs. Fix the worst interactions in the tax system that punish necessary withdrawals. Target help to low-income seniors without destabilizing the middle who are one diagnosis away from financial free fall.
And fund younger-generation investments—housing supply, childcare, education—through broad-based, growth-friendly measures rather than pitting generations against one another.
Generation Squeeze is on the right track in naming intergenerational inequities. Where it errs is in offering attractive but myopic Robin Hood solutions. Sherwood Forest is a charming story. Aging policy is not. It demands precision, humility regarding risk, and an appreciation that security in later life is fragile even for those who look comfortable on paper. We can do better—without pretending that taking away a basic pension from seniors who already face steep marginal taxes will somehow make the system fairer for everyone else.