Does Canada have an aging crisis?
Let’s look at the facts: Immigration may not be a panacea for the greying of our population
It is conventional thinking in Canada that, since the population is aging, seniors need to be replaced by young immigrants. It’s the theory of most mainstream media commentators and the alarmist book by journalist Ted Fishman, titled Shock of Grey: The Aging of the World’s Population and How It Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival and Nation Against Nation ( Scribner).
As a stock theory, replacing elderly people with young migrant newcomers seems to make a bit of superficial sense. But more scholars have been pointing out the facts are not as dire as the pessimists exclaim — and the responses do not have to be drastic.
There is little doubt many advanced countries are seeing a higher ratio of elderly. That has to do with reduced fertility rates, the postwar baby boom and, most importantly, people living healthier and longer.
This aging trend has special relevance for regions such as Canada, Germany, Scandinavia and Japan ( the latter of which Sun reporter Erin Ellis wrote about in last Saturday’s Weekend Review.) But these countries are taking remarkably different approaches to their aging citizenry. While Canada responds by keeping immigration rates the second highest in the world after Australia, the other countries limit immigration and are creating alternative solutions. However, before digging further into the contentious issue of aging and migration, let’s address how Canadians struggle with how to discuss migration issues at all. For most people the topic is off- limits.
Liberal Canadians often associate opposition to high immigration with bigots, xenophobes and racists. The labels are tossed out by every one from academics to CEOs. And, in some places, there are historical reasons for linking opposition to immigration to extremists.
But many non- extremists now lament how so many people seem incapable of having a rational discussion about migration levels. One of them is liberal- left Oxford economist Paul Collier, whose second last book, The Bottom Billion, explored ways to raise up the world’s poor.
Collier’s new book is titled Exodus: How Migration is Changing Our World ( Oxford University Press).
Collier deals head- on with the problem of self- silencing. “In the liberal circles that on most policy issues provide the most informed discussions, migration has been a taboo subject. The only permissible opinion has been to bemoan popular antipathy toward it,” he writes.
“Moral positions on migration are confusingly bound up with those on poverty, nationalism and racism. Current perceptions of the rights of migrants are shaped by guilty reactions to different past wrongs. It is only possible to have a rational discussion of migration policy when those concerns have been disentangled.”
After Collier does a deft job of unsnarling the knot that has locked race into migration policy, one thing he does is challenge the claim that high immigration is the answer to a bulge of seniors.
Collier joins population specialists in arguing that bringing in large numbers of skilled immigrants to offset an aging citizenry might create a temporary financial “windfall” — but it will lead to longer- term problems “because increased life expectancy is a continuing process.”
Collier says opening up to a wave of skilled immigrants will “incur new ongoing obligations for spending,” such as pensions.
In addition, Collier says governments, in their ineptitude and fear, often do not take into account who they are welcoming. In Britain, for instance, he discovered that pressure to allow dependent relatives was so intense that by 1997 “only 12 per cent of migrants were coming for work.”
Even though Canada’s current ratio of non- skilled migrants is not so exaggerated, migration analysts, including at the C. D. Howe Institute, say Canada’s immigration intake has almost no impact on offsetting the aging of our population.
Compared to what Collier calls the “drastic” approach of hiking immigration rates even higher, what are other responses to aging populations?
One of Collier’s recommendations is to lengthen retirement dates to correspond to what is essentially good news: That more people are living longer and more actively.
Another option is for governments to spend built- up assets on the elderly, just as individual people do once they retire, creating new kinds of jobs.
Still, some will ask, “What about the health care funding catastrophe caused by an aging citizenry?” In Canada, McMaster University economist Michel Grignon is among those debunking the fiction that a growing cohort of seniors poses a financial crisis.
While medical costs are rising, Grignon says, “it doesn’t have much to do with population aging.”
The real tidal wave in health spending, he says, relates to price inflation for drugs and doctors and expenses linked with technical progress ( new diagnostic tests and surgeries).
Indeed, it’s worth asking: Does Canada have an aging crisis at all? Fourteen per cent of Canada’s population is over 65.
And The Economist magazine recently reported that Canada’s “old- age dependency ratio,” which measures the proportion of those over 65 to younger adults, is far less than that of Japan, Germany, Italy, France, Britain and other developed countries.
Here is how three countries are handling aging populations:
Japan
In contrast to Canada, which demographers predict will have a population that is almost 50 per cent foreign- born by 2031, Japan is among the East Asian countries that do not welcome immigrants.
“Japan has become one of the richest societies on earth while remaining completely closed to immigrants,” Collier writes. Japan is also a more egalitarian country than Canada; the gap between rich and poor is far less.
Still, as Ellis wrote in the Sun, it’s projected that 33 per cent of Japanese residents will be above age 65 by 2030, compared to 23 per cent of Canadians.
Japan’s response is to keep seniors working longer, raise its sales tax and build designated communities that help seniors enjoy “second- life” jobs.
Norway
This is one of several Scandinavian countries where politicians have made the ethical decision to restrict immigration while sending far more money than Canada in aid to poor countries.
Norway recognizes lower birthrates and skilled domestic workers have made possible solid benefits for seniors. Scandinavian countries also encourage higher birthrates by providing universal daycare and free higher education.
As Scandinavian economics professor Torben Andersen says, high immigration threatens the sustainability of generous welfare systems. Far from helping to maintain programs, Andersen says “migration may make them unviable because of the combination of the higher dependency ratios and lower skills levels of many migrants.”
Germany
Germany has a seniors’ population that is proportionally much bigger than in Canada.
But, compared to Canada, it hasn’t put as much emphasis on responding with higher immigration. While many Canadian companies “poach” skilled immigrants and temporary foreign workers from poorer countries, a key to Germany’s economic success has been to require companies to fully train its domestic young people.
Given such varied policy responses to questions involving aging populations and immigration, Collier reminds us that the ethical question is not whether migration itself is good or bad.
The better question is: “How much is best?”