Thursday, March 30, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
No Result
View All Result
Macdonald-Laurier Institute

MLI Paper – Solutions for an aging population: Avoiding the $67 billion deficit in Canada’s future

February 7, 2012
in Domestic Policy Program, Economic policy, Health, Latest News, Papers, Releases
Reading Time: 4 mins read
A A

MEDIA RELEASE

February 7, 2012, Ottawa, ON – Canada will soon face the full burden of an aging society. The greying and eventual retirement of the baby boomers will cause national income growth and tax revenues to slow and public programs such as health care and income support for seniors to become more costly. In a 2011 Macdonald-Laurier Institute (MLI) study, Professor Christopher Ragan calculates that slower economic growth coupled with higher spending on age-related programs and health care will result in an all-government deficit of 4.2 percent of GDP in 2040. A deficit of this magnitude today would be roughly $67 billion and would be in addition to deficits being run for any other reason. Aging is thus a huge challenge to responsible public finances in Canada in the coming decades.

To help Canadians understand the issues and the options for a reasoned response to these challenges, MLI is today releasing collected essays by five leading Canadian thinkers on how to solve Canada’s looming demographic deficit: Professor Janice MacKinnon of University of Saskatchewan and former NDP Minister of Finance, Saskatchewan; William Watson of McGill University and the Financial Post; Professor Bev Dahlby of University of Alberta; Professor Ronald Kneebone of University of Calgary; and MLI Director of Research Jason Clemens. The common solutions identified by the experts as well as some of the unique recommendations are summarized below:

Health Care

The contributors all agreed that the status quo in Canada’s health care system is not sustainable. Based on her extensive experience in fixing Saskatchewan’s public finances, Professor MacKinnon offers a number of specific recommendations. She says, “Diverting service delivery away from the traditional hospital model, which is expensive, heavily unionized, and therefore difficult to manage efficiently, towards smaller clinics would save dollars and provide better patient care.” She also recommends a number of other targeted strategies such as moving patients from emergency rooms to primary health clinics, changing the payments for doctors from fee-for-service to salaries, re-classifying some portion of healt care spending so that it is a taxable benefit for individuals, and encouraging provinces to co-operate to limit salary increases for health care professionals.

Drawing inspiration from the successful welfare reform of the 1990s, Jason Clemens argues that the federal government needs first to reform the health transfers to the provinces more extensively than what has already been proposed by Finance Minister Jim Flaherty. In particular Clemens argues the federal government must allow the provinces greater flexibility and autonomy in the design, regulation, financing, and provision of health care while retaining the principles of universality and portability.

Labour Market Reforms

Among the authors there is broad support for measures to improve the incentives for Canadians to work. Four of the five contributors mentioned the need to reform Canada’s Employment Insurance program to ensure it acted as a genuine insurance system against unplanned unemployment. In particular, several essayists argued for the need to eliminate seasonal employment biases and social programs now embedded in EI.

Other labour market reforms, such as a) improving access for skilled-immigrants and recognition of their credentials; and b) improving incentives for older workers to remain in the labour market post-age 65, are mentioned by individual contributors as ways to improve labour market participation.

Economic Growth and Productivity Improving Reforms

Several of the essays focus on improving the country’s rate of economic and productivity growth. Eliminating inter-provincial trade barriers to improve economic efficiency is highlighted by several of the writers.

Ending supply management, eliminating regional development subsidies by the federal government, and encouraging greater trade through infrastructure development using public-private partnerships (P3s) are also mentioned.

Taxation

The essayists agree that Canadian governments needs to be smarter about tax policy. Reform would seek a better balance between the need to generate revenue while minimizing the costs of taxation to the economy in the form of disincentives for work effort, savings, investment, and entrepreneurship.

Two of the contributors argue for simplifying the tax code as a means both to improve economic growth and increase revenues without increasing tax rates. Professor Watson and MLI’s Clemens both argue that tax expenditures should be thoroughly reviewed and substantially reduced. Such an action would result in higher revenues, although Clemens suggests that the revenues gained be earmarked for lower income tax rates, thus spurring both economic growth and tax revenues.

Unique Recommendations

There are two substantial recommendations offered by individual essayists that were not raised by other contributors. First, Professor MacKinnon urges a broad review of Aboriginal policy with a focus on education and training in order to afford First Nations people the proper skills and knowledge to participate more fully in the labour market. Second, Clemens argued for an increase in the age of eligibility for public retirement programs such as Old Age Security and the Canada Pension Plan. Such an increase could mitigate the cost pressures of the programs over time and could be implemented slowly over a two-decade period so as to avoid disruption in retirement planning. In addition, Clemens argues that such increases in the age of eligibility would reflect the marked increases in life expectancy that have not yet been reflected in retirement income programs. These recommendations are particularly timely given the recent indication by Ottawa that it is considering raising the age of eligibility for the OAS/GIS.

Jason Clemens concludes, “Canada can either proactively implement solutions to this coming problem or react, perhaps in crisis, when the full weight of the costs of an aging society fully confront our society. The contributors to this series have offered a series of practical, workable solutions to this coming fiscal deficit. At the very least, the problem and potential solutions should be discussed and debated.”

Click here for full study, Canada’s Looming Fiscal Squeeze: Collected Essays on Solutions.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government. www.macdonaldlaurier.ca

Contact

Tripti Saha
Communications Officer
Macdonald-Laurier Institute
613-482-8327 ext.105
tripti.saha@macdonaldlaurier.ca

 

 

 

Previous Post

Jack Granatstein: We don’t need the UN’s permission

Next Post

Financial Post Exclusive: Five ideas to raise the money we’ll need to deal with health care for a rapidly aging population

Related Posts

Hitting the ceiling: Can Canada continue to support Ukraine militarily? Alexander Lanoszka for Inside Policy
Inside Policy

Hitting the ceiling: Can Canada continue to support Ukraine militarily? Alexander Lanoszka for Inside Policy

March 30, 2023
Ukraine war fatigue is settling in – and must be resisted: Matthew Bondy for Inside Policy
Inside Policy

Ukraine war fatigue is settling in – and must be resisted: Matthew Bondy for Inside Policy

March 30, 2023
Russia’s war in Ukraine: Looking back and looking forward – Balkan Devlen for Inside Policy
Inside Policy

Russia’s war in Ukraine: Looking back and looking forward – Balkan Devlen for Inside Policy

March 30, 2023
Next Post

Financial Post Exclusive: Five ideas to raise the money we’ll need to deal with health care for a rapidly aging population

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario
K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Follow us on

Newsletter Signup

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

Inside Policy Magazine

  • Current Issue
  • Back Issues
  • Advertising
  • Inside Policy Blog
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
    • Women’s History Month Fundraiser
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Energy Policy Program
      • Energy
      • Environment
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Competition Policy in Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Annual Reports
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media

© 2021 Macdonald-Laurier Institute. All Rights reserved.