Old Age Security (OAS) just received another raise. For October through December 2026, the maximum monthly OAS payment rises 1.4% to $762.50 for Canadians aged 65 to 74. Those aged 75 or older can receive as much as $838.75. Over the past year, OAS has increased 3%.
That’s almost perfectly aligned with Canada’s latest headline inflation rate. Yet retirement doesn’t happen inside the average Consumer Price Index basket.
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Your inflation can be different
Statistics Canada reported overall inflation of 3% in August. Look underneath that figure and the experience changes quickly.
OAS is reviewed quarterly using changes in the Consumer Price Index. Payments can rise when the cost of living increases and won’t fall when CPI declines. That’s useful protection, but not personalized protection.
A retiree driving frequently could feel transportation inflation far more than someone living downtown without a car. Another household could spend much more on health costs, food, or travel. So I’d treat OAS as one layer of retirement income rather than expect it to perfectly track my household budget.
Build your own increase
That’s where growing investment income can help. I specifically went outside the handful of dividend names that appear in every Canadian income conversation and landed on Canadian Utilities (TSX: CU).
Canadian Utilities owns regulated electricity and natural-gas transmission and distribution assets through ATCO Energy Systems, alongside energy infrastructure businesses in Canada and Australia. It’s the sort of business retirees can understand without needing an earnings-call glossary and a strong coffee.
A long dividend record
Canadian Utilities raised its dividend again in January. The quarterly payment increased to $0.46 per share, or about $1.85 annually. That marked its 54th consecutive year of dividend increases. At the October 1 closing price of $51, the shares yield roughly 3.6%.
That’s considerably more than OAS’s latest quarterly percentage increase, although the comparison isn’t apples to apples. OAS is government-supported retirement income. A dividend can be reduced, and the share price can fall.
The attraction is that Canadian Utilities has an opportunity to keep raising its payment over time. Second-quarter adjusted earnings reached $140 million, or $0.51 per share, compared with $121 million a year earlier. The next growth project is already moving.
Put $2.9 billion to work
In July, Canadian Utilities received final regulatory approval for its Yellowhead Pipeline Project in Alberta. The roughly 235-kilometre natural-gas pipeline comes with an estimated $2.9 billion investment and capacity of about 1.1 billion cubic feet per day. Company filings describe the project as fully contracted.
Construction is beginning in 2026. That’s the sort of catalyst I want behind Canadian dividend stocks – money going into assets that can potentially expand future earnings instead of relying solely on cost cutting to fund the next increase.
Bottom line
Canadian Utilities isn’t cheap simply because it’s boring. At $51, the shares trade around 19 times forward earnings after rising more than 30% over the past year. Utilities also borrow heavily to finance infrastructure. Higher interest rates, construction overruns, and unfavourable regulatory decisions can reduce returns. That means I’d build a position gradually, particularly for investments held inside a TFSA where sufficient contribution room exists.
OAS is doing what it’s designed to do. The maximum payment for Canadians aged 65 to 74 has risen 3% over the past year. Your retirement expenses won’t necessarily move by the same 3%. That’s why I’d want another source of income with the ability to grow.
Canadian Utilities has managed that for 54 consecutive years. I wouldn’t expect OAS alone to keep up with every retirement bill when I can build a pay raise of my own.
