“Before potential new spending is announced in the Throne Address, Ottawa faces decades of red ink that will inevitably weaken Canada’s federal finances and place a genuine burden on long-term generations,” said Jake Fuss, an economist at the Fraser Institute and co-author of Canada’s ageing population and long-term projections of federal finance.
The review estimates deficits ranging from 2. 6% to 3. 1% of GDP between 2021 and 2050 in conservative assumptions, adding that the absence of recession and inflation and interest rates remain low.
Federal debt is expected to rise from 49. 1% of GDP in 2020 to 69. 6% in 2050, based on conservative assumptions.
The main thing in these deficits is the ageing Canadian population, which means more retirees relative to the number of workers. The percentage of the population over the age of 65 is already more than 18% and is expected to succeed at 24. 1% until 2050.
“An ageing population means more public spending on systems such as old-age safety and health care, while fewer people (as a proportion of the population) run to pay taxes,” Fuss said.
“The imbalance that we are already seeing between spending and income in Ottawa will worsen as Canada’s population ages,” said Steven Globerman, Resident Research Fellow at the Fraser Institute, Professor Emeritus at Western Washington University and a co-author of the study.
“Governments will have to make a decision: reform spending and adopt economic expansion policies to mitigate the effects of an ageing population, or have giant deficits for decades. “
Steven Globerman, resident researcher at Fraser Institute
For media interviews or information, contact: Drue MacPherson, Fraser Institute 604-688-0221 ext. 721drue. macpherson@fraserinstitute. org
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The Fraser Institute is an independent Canadian education and public policy organization with offices in Vancouver, Calgary, Toronto and Montreal and links to a global think tanks network in 87 countries. long-term generations through the study, measurement and broad communication of the effects of government policies, entrepreneurship and possible choices on their well-being. To protect the independence of the Institute, it does not conform to government scholarships or study contracts. Org