Good morning. Thanks for having me.
My name is Paul Kershaw. I'm a professor at the University of British Columbia and founder of Generation Squeeze.
Gen Squeeze is a voice for younger Canadians and politics in the market backed by cutting-edge research. In your role, you may know of the Canadian Association of Retired Persons, or CARP. We're building the CARP for younger Canada.
Adapting to an aging population is not going to be new to anyone on this panel. Just as a reminder, back in the day when we started some of our major social programs, there were about seven workers for every retiree. Now there are fewer than four workers, and it won't be long before there are fewer than three.
That has huge implications for economic growth and competitiveness. Data shows that as the share of the population over 60 increases by 10%, literally our GDP per person drops by over 5%. That poses a big challenge to folks like you, who are having to anticipate how we adapt and meet the financial and health needs of our aging population, like my mom, who's a senior, and my 102-year-old grandmother, who probably uses more public investment than any other Canadian in the country while simultaneously having to meet the needs of her grandchildren and great-grandchildren.
The data there is weak. The data shows that the typical young adult today makes thousands less for full-time work once you adjust for inflation, even though they're more than twice as likely to have post-secondary education. They start very often with student debt for that luxury and then face home prices that have exploded by hundreds of thousands of dollars.
Alas, it's hard for folks like you to actually plan appropriately, because Canadian governments never break down our revenue and spending trends by age. Although this now happens on a routine basis for EU member countries, we don't do it in Canada, so I come with one very simple ask, and it turns out to be inexpensive: We need to begin, at the federal level, reporting how revenue and spending break down by age on an annual basis. In doing so, we would essentially put age into the “plus” of GBA+, or gender-based analysis plus, which we launched last year.
Why do this? It's a pretty straightforward answer. The goal ought to be organizing budgets that work for all generations. The data suggests that some troubling patterns are emerging in the academic literature, and it would be great if the Department of Finance could actually dig in and confirm if they are also worried about some of these trends.
When should we start? We can do it by the 2019 budget.
Who would perform the analysis? The Department of Finance.
What would it cost? I believe this will be your least expensive ask for the 2019 budget year: one staff person's time.
How would the analysis be performed? We already have a peer review methodology developed at the University of British Columbia that could be adopted outright, or adapted, as judged appropriate, by that one talented staff person in Finance.
What would parliamentarians learn? It would be three things.
First, on a routine basis, you would know how spending and revenue have played out by age in that current year. For instance, looking back on the last budget, you would see that in 2018 the Government of Canada increased its annual spending on the old age security system by $16 billion as of 2022. By contrast, the additional spending for child care and parental leave didn't even grow by a billion dollars. If the latter two things got bullet points in the press release, the old age security increase didn't even get a bullet point there.
We would also have a chance to see trends over time. Those trends would show that over the last four decades we have increased spending on people over 65 in Canada—like my deserving, lovely grandmother, who is 102—at a rate that's four times faster than we've increased spending on her kids, grandchildren, and great-grandchildren. Simultaneously, we would also learn that we're asking a younger demographic to pay considerably more in taxes today for medical care and old age security for those over 65.
Last, we'd have a chance to look at how debt and deficits have been unfolding. One of the things that we can see over the last four decades is that after adjusting for economic growth and inflation, debt per person under the age of 45 has increased from about $15,000 in today's terms to over $45,000, while the ecological debts that we leave for younger people are also three times larger. This is because we now need to reduce our ecological footprint per person at a rate that is three times faster than we have done over the last four decades if we're going to meet our climate commitments to the Paris accord and fend off some of the very worrisome predictions that came out again from the UN intergovernmental panel just recently.
Why might you not do it?
There's really only one reason. The most common concern is that if we report age patterns in spending, it's divisive, kind of pitting younger Canadians versus older Canadians.
Similar sorts of things have been said in the past about providing data broken down by gender. We're going to pit men against women, or if we do indigenous Canadians versus non-indigenous Canadians.... While we could be understanding of those concerns, generally we think they're self-defeating. We're all in this together, and more information is generally better.
It is now absolutely worthwhile for us to put age into the plus of GBA+. In fact, age is already identified in the language; it's just not yet being operationalized. Your jobs will be so much easier to do if you have that excellent information before you.
Thank you very much.