At the end of the Second World War, a new generation was born. This population explosion is known as the “boom.”
Now, some of us may have heard this term thrown around from time to time and not thought much about it. Some of us may even know that it was a period in Canadian history that witnessed a significant spike in birth rates and immigration that lasted two decades. In 1960, for instance, Canadian women were averaging four children each. To put this number into perspective, in 2006 women in this country averaged 1.5 children each, a dramatic decline in birth rate. Today, the “boom generation” constitutes one third of the entire Canadian population, roughly eleven million people.
Few of us stop to think about what sort of impact this massive boom generation will have on our country, and what sort of policy implications it will have on Canada for the next thirty years. Instead, we continue to believe that we will have the tax base available to not only sustain our current public service expenditures, but also extend them to include proposed Liberal Party of Canada innovations such as a national child care program.
For the last five decades, the boom generation has been working, providing, consuming and most importantly, have been paying taxes to provide a large pool of revenue that our country has used to provide services that we have come to know and expect, such as public health care, Employment Insurance (EI), the Canadian Pension Plan (CPP) and Old Age Security (OAS).
However, 2011 will be the first year a baby boomer, born in 1946, will reach the age 65. What does this mean for our generation? This means they will qualify for CPP and OAS, and will no longer be a source of government revenue, beyond consumption. They will become dependent on the state to provide the services that they have paid into all their lives, services that they are clearly entitled to. Each year following 2011 will witness increasing numbers of baby boomers retiring, growing old and depending more and more on the state and our generation.
As the baby boom generation begins to enter the retirement age, the demands for physicians, drugs, hospital facilities and senior care are going to increase exponentially. Reports estimate that by the early 2020s, health expenditure growth will exceed population growth by 2.5 percent. What does this mean? This means fewer children and more seniors. This means greater demands on public health care and fewer demands for national child care. This means less people to tax and more people to provide for. So why not add a national child care program to the equation in order to add more hypothetical salt to our future wounds?
By examining the age distribution of government spending on all programs, David K. Foot, a professor of economics at the University of Toronto, was able to calculate that per capita cost of dependent seniors in the public sector in Canada was almost 2.5 times higher than for the dependent young. Dependency is the years before legal working age and the years after retirement. This means that for every dependent child born in Canada, a senior requires 2.5 times more in public funding. So, for the next 30 years, the cost of the growing and ageing boom generation is going to require a lot of tax revenue.
This is why a national child care program in Canada is silly. Why would we put greater amounts of resources towards forming a national public child care program, when all of our cost demands are going to be coming from one third of Canadians who will be entering retirement in the next twenty years? Would we not want to prepare for this sort of demand by funneling extra resources into health and senior care, making sure they have affordable medication and the OAS and CPP that we promised them? Or do we honestly believe we can handle both?
With a growing number of seniors, a small birth rate, and with senior public expenditures costing 2.5 times more than youth expenditures, [a national child care program,] like the one proposed by the Liberal Party of Canada, is simply not what Canadians are going to need.
After all, there are going to be a lot more grandmas and grandpas available to baby-sit in the next 30 years. Just kidding. But actually.
Kyle Mirecki fourth-year political studies honours student.
3: http://economics.about.com/od/incometaxestaxcuts/a/child care.htm
: http://economics.about.com/od/incometaxestaxcuts/a/child care.htm