Canada’s plans for population aging run afoul of the ‘intergenerational golden rule’ and needs to be remedied
Dr. Paul Kershaw is a policy professor at the University of British Columbia and the founder of Generation Squeeze, Canada’s leading voice for generational fairness. He offers policy advice to governments of all party stripes, including the current federal cabinet.
It is time to admit that Canada’s plans for population aging run afoul of the “intergenerational golden rule.” As Statistic Canada’s former assistant chief statistician, Michael Wolfson, famously wrote: “One generation, when it becomes old and frail, should not expect to be treated any better by its children than it treated its parents’ generation in their old age.”
Income tax rates are generally lower now than half a century ago. A middle-earner in Ontario making $54,000 in 2022 paid 15.2 per cent of that income in federal and provincial income taxes; back in 1976, they paid 17.6 per cent, or $1,260 more. A high earner with $240,000 in income pays 36.9 per cent today; in 1976, they paid 38.1 per cent, or $2,800 more. Similar trends exist in other provinces.
These fiscal shifts reveal that “many hands made light work” half a century ago. In the 1970s, there were seven working-age Canadians to support every retiree, thanks to the postwar baby boom. But as boomers began to retire, the share of working-age residents contributing tax dollars to these programs also began shrinking. Now there are just three per retiree. With fewer hands, the tax burden on each younger person grows heavier.
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