A snapshot of Canada: why we’re lucky, and need more luck

In 1967, at Canada’s 100th anniversary, the popular song at the time contained the line “now we are 20 million…” (the rest of it, looking back, was a little cheesy, so I won’t give the whole thing).

The population in the last 47 years has about doubled, but more important, it has changed in other significant ways. The implications are formidable for the coming several decades.

It might also be appropriate to say that the “population ripple effects,” if you will, of the Second World War are still being felt in our country.

Last week, Statistics Canada released the results of the demographic aspects of Canada based on the last census, of 2011. So, let’s take a deeper look into our population.

History
Canada lost about 37,000 people in World War II. Mostly, these were men, as women did not have any significant combat roles in that war. It was a heavy toll for a country with such a (then) small population. It dramatically affected many families, and hurt our economy as well.

In the ten or so years after 1945, when the war ended, the so-called “baby boomers” were born. In those years, our population was fairly well distributed, in that there were many more young people (under 15) than older people. Life expectancy at the time was far from where it is today.

Remember also that in those years, there was no CPP. Life was harder.

There were not as many people in the 20-30 age group, likely the result of the losses we suffered during the war. Also, the composition of the population was such that the numbers of people above age 45 diminished with each year. Put another way, our population was young. And, there were many more people under age 15 relative to those over 65.

The distribution has changed dramatically in the decades since the end of the war. Medical advancements have been spectacular, and life expectancy has climbed.

In 2006, the last year the census was done, the distribution showed the largest proportion of the population being around 45-50 years of age. Stats Can says this is the ageing baby-boomer segment of the population.

But perhaps more important, in 2006 there were far more people at the higher age ranges, and far fewer at the younger age ranges. On July 1, 2013, there were 5,379,600 people above age 65 (15.3% of the population). Meanwhile, the numbers of people under age 15 that day was 5,674,100.

By now, those over 65 likely outnumber those under 15. The gap has changed significantly.

The reason that experts examine carefully those numbers is that they have major implications for the future of our workforce and its ability to keep pace with new technology, maintain a high level of productivity and, ultimately, support our elders.

The fewer people going forward who can pay into the CPP suggests long-term trouble in being able to maintain the CPP (not to mention, by the way, the OAS, which is not funded except out of our general revenue).

Today
Demographically and otherwise, what is happening in Canada now is this:

First, the population is closing in on 36 million. The median age of Canadians is now about 41 years. It has been on the rise for some time. “Median” means that, in Canada, there are now as many people above age 41 as below it.

The most recently available measure of new applicants for CPP benefits was in April. The table (published by Service Canada) shows that across the country there were 26,490 new pensioners (just in April!).

This figure gives you further insight into why the federal government does not want to increase CPP benefits. There are too many new applicants because, of course, the population is ageing. To pay more out will put a strain on the plan in the not so long term!

Meanwhile, between 2006 and 2011, the numbers of people between ages 10-14 and 40-44 years plunged. The numbers of people in every other age category rose, especially in the categories of ages 60-64, 85-89 and over 100 years.

You see how we are ageing.

There are some shifts in population – people are moving in high numbers to Alberta, mainly from Ontario, B.C., Quebec and Nova Scotia.

Maybe most important, our working age population is ageing. A recent article examined this issue just in Ontario. Among the findings are that the newly re-elected premier will have trouble growing the economy in Ontario because of the demographics of her province’s workforce.

The problem is not confined to Ontario, but may be more pronounced because it is our most populous province. I expect the problems in B.C. are not far different, except that the numbers here are smaller (our population exceeds 4 million but Ontario’s exceeds 14 million).

Of our cities, Peterborough (Ontario) and Trois–Rivieres (Quebec) have proportionally the most seniors (that is, over age 65), at 20.3%. Understandably, they also have the smallest proportion of people under age 15 (under 14%). Vancouver has a 14.1% proportion of seniors and 14.6% of people under 15 (perhaps in part due to the high cost of housing for young families).

The conclusions?
As a country we are ageing, our birth rate is in decline and immigration helps us maintain a population growth rate. Our labour force is ageing, but at least we are living longer.

In the next two decades, our senior population will increase dramatically. The demands on the CPP and OAS will accelerate. Therefore, we will need the tax revenue to support the OAS – and the guaranteed income supplement that thousands of seniors now and in the future will need.

With good policy implementation and some luck, immigrants to Canada will remain and ultimately contribute from decent jobs to our tax system (there is reason to be concerned with this – there is a high rate of departure by immigrants within the first 10 years of their arrival in Canada).

And hopefully, our birth rate won’t sink further so that there will be other, non-immigrant young people who will also from decent jobs contribute to our tax system. We need young people, immigrants and otherwise, as do several other developed countries.

What does this mean for us all? First, in my opinion, we should feel fortunate to be here. In the world today, on July 1st, Canada is probably among the best countries, generally, in which to live.

Otherwise, whoever you are, start saving if you can, because statistics say that you will live above 80 if you are male and above 84 if female.

Anyone over 50 now can probably depend on the CPP and OAS for their retirement, but it won’t be enough to fully support you given the costs of living.

You need to save and invest in assets that will give you a decent return without too much risk. I believe that what worries the government most is a growing senior population without spending power, which may stall our economy. For individuals, it’s a potentially serious problem.

So, start putting together some sort of plan. Don’t let it go much longer. In the meantime, have a pleasant Canada Day: things could be much worse!

This column ran in the Richmond Review on July 2, 2014.