Time is running out to deal with the costs of aging on our economy

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Time is running out to deal with the costs of aging on our economy
PopulationHealthMoney
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By 2067, we will have only two working-age adults per senior. This shift will slow growth in the economy and government revenues

Parisa Mahboubi is a senior policy analyst at the C.D. Howe Institute, where William Robson serves as president and chief executive.

Expressing the required increase in provincial tax rates across the country as a liability comparable to more familiar measures of government debt yields similarly staggering numbers. In Ontario alone, the projected cost increase over the next 45 years has a present value of $723-billion, equivalent to 70 per cent of the province’s gross domestic product . The equivalent national figure is more than $2-trillion.

Shifting toward consumption taxes such as the GST/HST , which are less sensitive to demographic shifts, could provide a more stable revenue stream. Consumption taxes capture revenue from spending, which remains more constant even as the population ages, making them a crucial component of a sustainable fiscal strategy.

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