Federal budget to restore Old Age Security eligibility to 65

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Prime Minister Justin Trudeau says next week's federal budget will return eligibility for Canada's Old Age Security pension to 65 years old.

Speaking to a business crowd at Bloomberg headquarters in New York on Thursday, Mr. Trudeau announced that he will make good on his election promise to overturn an increase in the age to 67, brought in by the former Conservative government.

"How we care for our most vulnerable in society is really important," he told moderator John Micklethwait, the editor-in-chief of Bloomberg News. He said his predecessor, Stephen Harper, was wrong to move the OAS eligibility age to 67. "We think that was a mistake," Mr. Trudeau said.

Mr. Harper raised the age in the 2012 budget, making it effective for 2023 – a measure that federal officials at the time estimated would save $10.8-billion a year once the plan was fully implemented in 2030.

Even though other countries are looking to increase the pension age, Mr. Trudeau said "that is a very simplistic solution that won't work to [solve] a very complex problem," which also includes encouraging people to stay healthy.

"There needs to be a little bit of sophistication when we look at it," he said, noting that in some professions, such as law or investment banking, working for longer might not be an issue.

"But anyone who has worked with their hands as a labourer or assembly line worker, or has worked in the resource industries and has been in a much more physical job, once you start reaching 65 – regardless of all the advances in Canada's extraordinary medical system – there are real challenges around how much longer someone can keep working in those jobs."

Mr. Trudeau's announcement was immediately met with skepticism from the opposition parties.

The Conservatives said the demographics in Canada have changed – and pension benefits must change, too.

"Canadians are living longer and healthier lives, and the OAS program needs to reflect this new reality and provide the option for individuals to work longer and receive higher retirement benefits," Conservative MP Karen Vecchio said in a statement.

The New Democrats called Mr. Trudeau "a bit arrogant" for making the announcement after he snapped at Leader Tom Mulcair in Question Period two months ago for asking when the reversal would be implemented.

The announcement capped off a whirlwind two days for Mr. Trudeau in New York, during which he announced Canada's bid for a United Nations Security Council seat in 2021 and was honoured for his work on gender equality. But he was forced to defend his government's $15-billion deal to sell military vehicles to Saudi Arabia in the face of human-rights abuse allegations.

On Thursday, Mr. Trudeau met with business leaders, including Bloomberg LP chief executive Michael Bloomberg, who praised Mr. Trudeau in a recent column as "an energetic and pragmatic Prime Minister" who is right to tackle climate change and invest in infrastructure.

At the Bloomberg town hall, Mr. Trudeau was also asked about Canadian aerospace manufacturer Bombardier, which wants a $1-billion lifeline from the federal government. He praised the company's C Series aircraft as "an extraordinary airplane … more fabulous in all ways than just about any other plane on the market."

While Mr. Trudeau said the government wants to ensure a strong aerospace industry in Canada for the next several decades, he would not immediately commit to any funding – although advisers are now analyzing the feasibility of such an aid package.

"This will be answered when we have the right answer to give," Mr. Trudeau said. "We're taking our time and acting in a deliberate and thoughtful way to make sure that we're doing the right thing in the interests of both the Canadian industry and high-quality jobs, but also our responsibilities towards taxpayers."

Mr. Trudeau also pitched his government's plan to spend $60-billion on infrastructure over the next decade. The Liberals have said they would run $10-billion deficits over the next three years, but that number is now expected to be higher.

The Prime Minister said the plan will start with "unsexy things that governments hate to announce," such as maintenance and upgrades. "A lot of people are on the austerity side, thinking that, you know, we have to control government spending. Canada is positioning itself on the investment side," he said.

With unstable oil prices, Mr. Trudeau added that the government views climate change as "an incredible opportunity" to invest in green technology and renewable energy projects.

The wide-ranging town hall also included questions from the audience, made up primarily of business people. When asked whether he would be able to work with U.S. Republican front-runner Donald Trump, Mr. Trudeau said there are always issues of common ground between Canadians and Americans, including a desire to see Americans do well.

"I think we're going to see what Americans are made of in this upcoming election," he said.

The Prime Minister also shared insight into his massive electoral win last fall, telling the audience that the turning point occurred when the NDP announced it was going to balance the budget, and the Liberals vowed to run a deficit and increase spending.

"I went home to my wife and I said, 'I'm pretty sure we just won the election.'"