Flaherty vs. Garneau: Is an aging population just one cost-driver among many?

Anyone paying even glancing attention to public policy debates over the past decade or so can’t have avoided taking in the received wisdom that an aging population is one of the most pressing challenges.

When he was prime minister, Paul Martin ranked demographic change at home right up there with the rise of Asian economies abroad as his top policy preoccupations. Stephen Harper’s government has kept up the drumbeat—with Harper saying in his big speech in Davos at the start of this year that the demographic shift amounts to “a threat to the social programs and services that Canadians cherish,” Human Resources Minister Diane Finley slamming the opposition as “not interested in facing reality” when it comes to an aging population, and Finance Minister Jim Flaherty noting that the issue comes up all the time in pre-budget consultations.

Against that backdrop of constant, anxious emphasis, comments this morning from Flaherty downplaying our nation’s greying as merely one concern among many sounded strangely sanguine.

It came up at a news conference when he was asked about this opinion piece by Marc Garneau, in which the Liberal MP (and possible contender for his party’s leadership) argues that equalization payments to the provinces should be adjusted to pay extra to those with more old people, largely to cover higher health costs.

Population aging is a particular issue in the Atlantic provinces. But Flaherty said it’s just one cost pressure among many, and so can’t be singled out for special consideration in the equalization formula, which is now being reviewed.

“This is a complex federation,” he said, “and there are people in Western Canada and people in Eastern Canada and people in Central Canada, all of whom have their own demographic challenges.”

Flaherty went on to cite large and fast-growing First Nations populations as an example of a comparable concern. “Some of the provinces speak to me about the size of their Aboriginal populations, and what a challenge that is for them, in terms of training and education and underemployment. There are lots of challenges that are complicated in a federation like Canada, not simply demographic challenges.”

That sounds even-handed. Yet Flaherty’s suggestion that other cost pressures on provincial programs might be fairly considered equal to those represented by aging breaks with a lot of recent political rhetoric and prominent policy thinking. (Here’s a sage overview from the Bank of Canada.)

Numbers alone can’t tell the whole story, of course, but forecasts suggest aging is in a league of its own when it comes to the changing profile of the Canadian population.

By 2036, Statistics Canada projects the Canadian senior population will reach 9.9 million to 10.9 million, more than double the 4.7 million 65-plus population of 2009. Sometime between 2015 and 2021, we’ll reach the point where we have more seniors than children for the first time ever. To use Flaherty’s point of comparison, Statistics Canada expects the number of Canadians of Aboriginal identity to hit 1.7 million to 2.2 million by 2031—in other words, roughly a fifth of the population of seniors.

Garneau’s case for using equalization to help out provinces with more old people is wide open for debate. There are many other options. But Flaherty’s response, effectively downplaying demographics as just one social-policy factor among many, seems an unconvincingly offhand response to a serious proposal.

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