Thread: The 'fiscal gap' created by aging populations

Ottawa's battling to rein in record deficits but there's a bigger problem at play that will make life even more miserable for politicians and taxpayers: Canada's aging population.

In a report released today, Parliamentary budget watchdog Kevin Page warns it's not good enough for Ottawa to simply balance the books - because of the increasing squeeze Canada's greying ranks will place on coffers.

He predicts that even if Ottawa slays the deficit, it will still have to confront an expanding "fiscal gap" in revenue over the decades ahead that rises to $20-billion to $40-billion annually within seven decades.

This will arise as Canada's work force shrinks in proportion to its growing pool of retirees, a trend that should both slow the growth of government tax revenue and increase demands for health-care spending and old-age benefits.

Mr. Page's new report effectively pours cold water on the idea Canada can "grow" its way out of trouble - as the economy expands and generates more tax revenue - or make do with a moderate restraint program.

The budget watchdog says the federal government must prepare to eliminate this revenue gap - through tax hikes or spending cuts - in order to keep its debt levels stable relative to the size of Canada's economy.

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Ottawa faces growing 'fiscal gap' - The Globe and Mail

We've known that this was coming for quite some time now. This is a challenge in many countries around the world, not just Canada. I think one thing we should do is increase immigration of young people to Canada to help offset our aging population. Already the only reason that Canada's population is growing is through immigration, we're not maintaining ourselves.

What do you think countries should do to try to deal with this situation?

The western world is seeing a steady increase of the mean population age; this is especially prevalent in western Europe where people are having less and less children. Health standards are also improving which is furthering the trend.

An influx of young immigrants will only provide a short-term solution to Canada's problems, as well as the problems of other countries - including the U.S. Immigrants will assimilate and have less and less children over time, eventually diverging fully from the childbirth rates in their own countries.

The age gap will eventually settle like it has in Japan, but governments obviously need to adopt changes to accommodate this new age structure. We're already seeing the results of our failure to do so with the baby boomers aging and the depleting funds of our entitlement programs. As the article mentioned, the only way to solve the problem is through tax hikes or spending cuts.

Originally Posted by AgentM

We've known that this was coming for quite some time now. This is a challenge in many countries around the world, not just Canada. I think one thing we should do is increase immigration of young people to Canada to help offset our aging population. Already the only reason that Canada's population is growing is through immigration, we're not maintaining ourselves.

What do you think countries should do to try to deal with this situation?

For people to make a sacrifice. The problem in the USA is that nobody wants to lose what THEY have. You hear retired Americans screaming all the time about fixing problems with the economy. Yet any time somebody says Social Security or Medicare...The AARP comes down like a sledge hammer on congress so hard they run in terror.

Originally Posted by AgentM

We've known that this was coming for quite some time now. This is a challenge in many countries around the world, not just Canada. I think one thing we should do is increase immigration of young people to Canada to help offset our aging population. Already the only reason that Canada's population is growing is through immigration, we're not maintaining ourselves.

What do you think countries should do to try to deal with this situation?

Stop abortion. As a society we simply can't afford it and you can only rob third world cultures of their young so much without experiencing problems neither we nor they need.

Originally Posted by Dutch

Stop abortion. As a society we simply can't afford it and you can only rob third world cultures of their young so much without experiencing problems neither we nor they need.

I really doubt that abortions have that big of an impact on population growth.

Originally Posted by Dutch

Stop abortion. As a society we simply can't afford it and you can only rob third world cultures of their young so much without experiencing problems neither we nor they need.

Stopping abortions, and I assume you mean making them illegal and punishable by imprisonment, is going to bring about a whole other set of problems down the road.

I just don't see lower population numbers as a problem. I realize it makes the buttholes of government officials pucker up when they see the loss of revenue, but imo that's a good thing. The loss of revenue I mean, not the puckering. Actually no, both are good.

Originally Posted by Winn

Stopping abortions, and I assume you mean making them illegal and punishable by imprisonment, is going to bring about a whole other set of problems down the road.

I just don't see lower population numbers as a problem. I realize it makes the buttholes of government officials pucker up when they see the loss of revenue, but imo that's a good thing. The loss of revenue I mean, not the puckering. Actually no, both are good.

But you know who's gonna pay for all these baby boomers making more and more use of healthcare, pensions, etc? Us, younger folks. Our taxes are going to go up, and our economy is going to suffer, and our standard of living will start dropping faster even than it is now.

Man, things suck for my generation.

Originally Posted by AgentM

But you know who's gonna pay for all these baby boomers making more and more use of healthcare, pensions, etc? Us, younger folks. Our taxes are going to go up, and our economy is going to suffer, and our standard of living will start dropping faster even than it is now.

Man, things suck for my generation.

You only have one shot to save yourselves - screw the generation behind you. That's what we do in America! And it works great! :rofl:

Originally Posted by Winn

You only have one shot to save yourselves - screw the generation behind you. That's what we do in America! And it works great! :rofl:

Hey, I like that idea! We'll be paying through the nose for our parents, so our kids can pay through the nose for us dammit! Debt deferments...anyone?

Originally Posted by AgentM

Hey, I like that idea! We'll be paying through the nose for our parents, so our kids can pay through the nose for us dammit! Debt deferments...anyone?

I'm tellin ya it works. Most young people don't pay attention to politics (present company excluded) so they're easy to screw.