Finance Minister Jim Flaherty is expected to announce in Thursday's federal budget that the age requirement to collect Old Age Security will increase to 67 from the current age of 65.

Luckily, Canada's public pension obligations don't pose a major threat to public finances. The Canada Pension Plan is in long-run balance. Old Age Security currently takes only 2.41 per cent of GDP. By comparison, Italy spends more than 14 per cent of GDP on public pensions -- up from 10 per cent only a few years ago."

Among the G8 nations, the U.S., the U.K., Italy, Germany, and France have already made upward changes to their retirement ages.

By 2031 -- the peak of the baby-boom retirement wave -- the share of GDP spent on Old Age Security will rise to 3.14 per cent. But compared to health care spending, the increase is small. One study co-authored by former Bank of Canada governor David Dodge projected that spending on health will grow from 12 per cent to 18.7 per cent of GDP by 2031.

"In the fight for government spending dollars in 2031, health is the elephant and the Old Age Security pension is the mouse."

Prime Minister Justin Trudeau's announcement that next week’s federal budget will cancel plans to raise the cutoff age for Old Age Security benefits to 67 is getting mixed reviews. Trudeau told an audience in New York Thursday that the budget will keep the eligibility for OAS benefits at 65, scrapping the previous Conservative government’s plans to change it to 67, starting in 2023.

Wanda Morris, from the Canadian Association for Retired Persons (CARP), dismissed suggestions that reverting back to 65 will bankrupt the country, telling CTV Power Play it’s an important tool to help alleviate poverty.

Aaron Wudrick from the Canadian Taxpayers Federation said he sees Trudeau’s move as “pandering to the people"