OAS Raise Falls Short for Many Retirees Seeking Income Growth

Canada's Old Age Security (OAS) payments have increased again, but retirees may find the raise insufficient to cover their actual living costs. For the last quarter of 2026, the maximum monthly OAS payment for Canadians aged 65 to 74 will rise 1.4% to $762.50. Those aged 75 or older can receive up to $838.75. Over the past year, OAS payments have increased by 3%, nearly matching Canada's headline inflation rate.

However, inflation varies significantly by expense category. While overall inflation was 3% in August 2026, transportation costs surged by 7.5%, and recreation, education, and reading expenses rose by 5.6%. OAS adjustments are based on the Consumer Price Index (CPI), which may not reflect individual retirement spending patterns.

To supplement OAS, some retirees turn to investment income. Canadian Utilities (TSX: CU) is one such option, offering a dividend yield of roughly 3.6%. The company has raised its dividend for 54 consecutive years and is investing $2.9 billion in the Yellowhead Pipeline Project in Alberta, which could boost future earnings.

While Canadian Utilities presents a growth opportunity, it is not without risks. The stock trades at a premium, and the company's heavy borrowing for infrastructure projects could impact returns. Experts recommend building positions gradually, especially within a Tax-Free Savings Account (TFSA) where contribution room is available.