Explosion of aging boomers unravels social safety net

Aging boomers plus a falling birth rate changes Canada's social fabric.

Aging boomers plus a falling birth rate changes Canada's social fabric.

March 4, 2013

Canada's social safety net could be in trouble as the population continues to age, warns a new study by the Institute of Marriage and Family Canada (IMFC).

"Population aging is the key demographic issue in Canada today," wrote IMFC researcher Derek Miedema in a study released in Feb. 2013 entitled Forty Years Below Replacement: Canada's Population Is Aging. What We Can - And Can't - Do About It.

"Many still worry about a population explosion. There's a lingering picture of people hanging on to the edge of the globe for lack of space that remains in people's minds," wrote Miedema.

"The reality is that Canadians need to pay attention to an explosion of senior citizens instead."

Even if Canada's population grows through immigration, that growth does not take aging into account, he says. Canada's birthrate has been below replacement rate for the past 40 years.

In 2010, Canada was short 109,000 babies to replace its population. Miedema said 1,022,971 more babies were needed since 2002.

In the next 25 years, as baby boomers hit their 80s, Canada will experience a decline in its labour force that is already seeing shortages in areas such as health care, mining, engineering and science, he said.


"Tax dollars pay for our EI benefits, health care and pensions," Miedema wrote. But the impact is more than financial, pointing to the 2010 rioting in Greece over austerity measures.

Other social consequences will be fewer relatives, including grandchildren, and friends to support elderly seniors. "There's also a question of what it means for children to grow up with fewer siblings, cousins and friends."

The last time Canada met a 2.1 replacement fertility rate was 1971, about 40 years ago, he wrote.

Miedema pointed out how closely the abortion rate tracks with Canada's replacement rate, noting "if every aborted baby had been born in 2006, 2009 and 2020 a replacement fertility rate would have been reached or surpassed. In 2007 and 2008, the replacement rate would have come close to being met."

As well, abortion statistics are underreported, he said. In addition to abortion, delayed childbirth and birth control are also responsible for the low fertility replacement rate of 1.63 children per woman of child-bearing age. Each woman would need to bear 2.2 children to replace the existing population.


Immigration cannot solve the problem, he said, noting the baby boomer generation is "so large that no realistic number of young immigrants could balance them out."

There is "no quick fix" for the problem, Miedema said, especially government intervention.

"Governments need to step back and allow for family freedom," Miedema wrote. "They can do this by leveling the playing field between families and individuals."


He urged government to institute a delayed promise to introduce income splitting so that one-income married couples would be taxed at the same rate as dual-income couples.

Japan is a case study for problems Canada will face soon with an aging population. Elderly Japanese over 65 make up one fifth of population.

"Where Japanese workers used to be able to carry the cost of the social safety net for one retiree on the shoulders of many, by 2050 the cost for one retiree will be borne by a single worker," he wrote.