Wednesday, September 30, 2009

Globe Article on Cost of Aging Canada

Jeffrey Simpson has this excellent piece in today's Globe on the cost of Canada's aging population and the reasons why no political party is serious about meeting these challenges. Here is an excerpt:

How far ahead do politicians usually think?

In a minority government, politicians think an hour ahead sometimes, a month more often, a year ahead occasionally. In a majority government, parties have the luxury of preparing for electoral combat in four or five years, and governments can plan for something other than tomorrow's survival.

....What kind of pressure lies ahead?

Pierre Fortin of the University of Quebec at Montreal, one of the very best public finance economists in Canada, tried to tackle the question of how much aging will cost. His answer: about $40-billion a year (in 2008 dollars) by 2020. In other words, in about a decade, even if Ottawa balanced the budget today – let alone run $100-billion in deficits in coming years – it would still be heading into the fiscal hole.

....Who in politics is talking seriously about this demographic fact? Which politicians have you noticed saying: We need to get the federal budget balanced, and then run surpluses as fast as we can after the recession ends, so that our country will be ready for what Prof. Fortin properly calls the “fiscal squeeze?”