Aging Population in Canada and Article Review

The demographic tide of Canada is becoming a nagging problem with a dwindling number of active workforce having to bear the increasing burden of quality universal healthcare. However, the problem is that the prospect of a slow growth in the labor market would only imply a slower growth of the general taxpayers and hence raising the tax is not a simple solution to managing the fiscal pressures. As the article indicates, in the absence of a Tax hike in this year's budget, the federal burden will continue to accrue and if no counter measures are undertaken by 2050, Canada's debts and deficits would equal the nation's GDP. The article suggests that a combination of increasing the GST, reducing government expenditure, and more importantly, other 'structural reforms' would be necessary to prevent the impending fiscal disaster. This is not a difficult prospect given the fact that Canada stands much better for structural reforms with its Debt to GDP ratio only at 33.9% compared to neighboring America whose Debt to GDP is almost double.

From a policy maker's point-of-view, the time is already critical to make these structural changes to sustain the development and to continue to be one of the best countries in the world providing Universal as well as a high standard of healthcare. As a policy maker I would definitely give high priority to the demographic transition that is slowly but surely happening. I would create policies that encourage active labor force participation, increasing retirement age, making pension compensation reflect the extra working years, encourage part-time working practice, etc.

Bibliography

1) Vancouver Sun, 'Aging Population will soon strain Federal Finances, Watchdog

Says', Feb 19th 2010, Accessed 25th February 2010, available online at, http://www2.canada.com/vancouversun/news/westcoastnews/story.html?id=02c089f9-7d20-4c4d-8623-7b25a2c99010