Ca­na­da un­pre­pa­red for an aging po­pu­la­tion

The ad­ver­se con­se­quen­ces of an aging po­pu­la­tion - de­fi­cits, debt and slo­wing eco­no­mic growth - can be mi­ti­ga­ted with prompt ac­tion

La Jornada (Canada) - - NEWS -

Ca­na­da’s po­pu­la­tion is aging, li­ke all in­dus­tria­li­zed coun­tries. But un­li­ke most in­dus­tria­li­zed coun­tries, Ca­na­da is doing al­most not­hing to pre­pa­re for the im­pli­ca­tions of an ol­der po­pu­la­tion. And, in so­me ca­ses, it’s mo­ving in the wrong di­rec­tion.

The­re’s am­ple evi­den­ce that hat Ca­na­dians are li­ving lon­ger. Ac­cor­ding to Sta­tis­tics Ca­na­da, li­fe ex­pec­tancy in 2011 was 81.7 years, com­pa­red mpa­red to just

57.1 years in 1921. The com­bi­na­tion bi­na­tion of

Ca­na­dians li­ving lon­ger and the e po­pu­la­tion bul­ge of the baby boom m ge­ne­ra­tion means se­niors should re­pre­sent 25 per cent of the po­puu­la­tion by roughly mid-cen­tury, y, from less than 15 per cent in n

2010.

As a re­cent study no­ted, the aging of our po­pu­la­tion will pla­ce enor­mous strains on go­vern­ment fi­nan­ces.

First, se­ve­ral go­vern­ment pro­grams that are sen­si­ti­ve to de­mo­grap­hics will ex­pe­rien­ce sig­ni­fi­cant cost pres­su­res. s.

Ta­ke for ins­tan­ce Old Age Sec­cu­rity (OAS) and the Gua­ran­teed eed

In­co­me Sup­ple­ment (GIS), two o in­co­me trans­fer pro­grams sup­por­ting por­ting se­niors. The cost of the­se pro­grams grams is ex­pec­ted to in­crea­se by 47 per er cent bet­ween 2017 and 2047 ba­sed on n a lar­ger sha­re of the po­pu­la­tion being eli­gi­ble. e

Si­mi­larly, health-ca­re costs are hea­vily in­fluen­ced by se­niors sin­ce so much of our li­fe­ti­me con­sum­ption of health ca­re oc­curs af­ter the age of 65. For exam­ple, in 2014, go­vern­ment per-per­son spen­ding on health ca­re was 4.4 ti­mes mo­re for tho­se over age 65 than for Ca­na­dians aged 15 to 64.

Se­cond, the­se spen­ding in­crea­ses will oc­cur as the sha­re of the po­pu­la­tion in the la­bour for­ce de­cli­nes. Ca­na­da’s la­bour for­ce par­ti­ci­pa­tion ra­te is ex­pec­ted to de­cli­ne from its peak of 67.6 per cent in 2008 to roughly 61.0 per cent by mid-cen­tury. This means eco­no­mic growth will be slo­wer than in pre­vious pe­riods, ma­king it mo­re dif­fi­cult for go­vern­ments to rai­se re­ve­nues.

The com­bi­na­tion of hig­her spen­ding and slo­wer-gro­wing re­ve­nues li­kely means much lar­ger de­fi­cits in the fu­tu­re un­less pro- grams are re­for­med. A re­cent cal­cu­la­tion sug­ges­ted that go­vern­ment de­fi­cits could grow as lar­ge as $143 bi­llion (in cu­rrent do­llars) by 2045 if no chan­ges are ma­de.

In 2012, the for­mer Con­ser­va­ti­ve go­vern­ment ma­de a rat­her te­pid re­form, plan­ning to chan­ge the age of eli­gi­bi­lity for OAS and GIS to 67. The chan­ges we­re to be im­ple­men­ted bet­ween 2023 and 2029.

Shortly af­ter ta­king of­fi­ce, the cu­rrent Li­be­ral go­vern­ment re­ver­sed this to main­tain the age of eli­gi­bi­lity for both pro­grams at 65. It’s It s es­ti­ma­ted this will cost the go­vern­ment $10.4 bi­llion mo­re in 2030.

A re­cent stu study illus­tra­ted how out of step this de­ci­sio de­ci­sion is with ot­her ma­jor in­dus­tria­li­zed coun­tries. Of the 22 high-in­co­me c coun­tries in the Or­ga­ni­za­tion for E Eco­no­mic Co-ope­ra­tion and Dev De­ve­lop­ment (OECD) apart from Ca Ca­na­da, mo­re than 80 per cent a are im­ple­men­ting so­me form o of in­crea­se to the age of eli­gi­bi­lity for pu­blic re­ti­re­ment pro­grams.

Of tho­se 18 coun­tries enac­ting chan­ges, al­most 60 per cent are mo­ving to 67 years of age. Ire­land and the Uni­ted King­dom are in­crea­sing the a age of eli­gi­bi­lity to 68. In ad­di­tion, fi­ve coun­tries ar are in­de­xing their age of eli­gi­bi­lit bi­lity for pu­blic pro­grams so it will a au­to­ma­ti­cally in­crea­se as li­fe ex­pec­ta ex­pec­tancy chan­ges. Ca­na­da is one of only fi­ve coun­tries that ha­ve de­ci­ded to do not­hing des­pi­te moun­ting evi­den­ce of the fis­cal pres­su­re pres­su­res co­ming down the pi­ke due to an aging po­pu­la­tion.

The ad­ver­se con­se­quen­ces from an aging po­pu­la­tion - lar­ge de­fi­cits, moun­ting debt and slo­wing eco­no­mic growth - can be mi­ti­ga­ted if proac­ti­ve ac­tions are ta­ken now.

Rat­her than ig­no­re the pro­blem or ma­ke mat­ters wor­se, as the fe­de­ral go­vern­ment’s po­licy re­ver­sal has do­ne, it’s ti­me for the fe­de­ral and pro­vin­cial go­vern­ments to show lea­ders­hip by pre­pa­ring for the aging of our po­pu­la­tion. -TROYMEDIA

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