Baby Boomer Dilemma in Canada
• After WWII, from 1945 to 1960, there were about 28 births on average per 1,000 people in Canada: - these babies are known as the ‘baby boomers’
• But these baby boomers did not have many children of their own, and they did not have many grandchildren, either.
• By 1970, the birth rate in Canada had dropped to 17 births per 1,000 people
• Since 2000, it has been hovering around 11 births per 1,000 Canadians
• Baby boomers will leave the workplace in large numbers between now and 2025
• 1960 to 1980 was the mass entry of baby boomers into the workplace
• number of workers earning a salary and paying taxes grew at a breathtaking rate
• The Welfare State experienced a rapid expansion
• We successively implemented hospital insurance, health insurance, low-cost college and university education, social services, public pension plans, more generous old age pensions and employment benefits, etc.
• Politicians had an easy time - money was no problem
• The huge addition to the tax revenue from the baby boomers allowed them to do a lot of great things
• Baby boomers born between 1945 and 1960 are today between 45 and 60 yrs old
• In 2020, they will be 60 to 75 years old - most of them will have begun their retirement
1. Less tax revenues
• In 2006 51% of Canada's total population was working.
• By 2020, when the baby boomers' departure will be underway, only 49% of the population will be working (if the employment rates remain stable)
• What will the impact be on the government tax revenues?
• Canadians paid $500 billion in income and other taxes in 2006, if predictions are correct our governments will collect $20 billion less ($500 billion) in 2020
2. More health-care spending
• In 2006 13% of the population was 65yrs+, it will be 18% by 2020
• On average a senior citizen costs 5X more in terms of health-care and social services compared to a younger adult