Baby boomer data will highlight upcoming policy challenges

The next set of data from the 2011 census shouldn't hold many surprises for anyone in Canada — but it no doubt will.

On Tuesday, Canadians will discover how old their society has grown. It will be apparent in black and white how fast the baby boomers are entering their golden years, and how quickly the population of seniors is overtaking the number of youngsters.

It's the second tranche in a series from Statistics Canada's 2011 census, a full count of the Canadian population done every five years.

Experts say they expect to see evidence that the number of people in Canada over the age of 65 will soon outnumber those under the age of 15 — the result of a surging senior population and a steady decline in the ranks of children.

None of it will come as a shock to demographers, who have watched the baby boom bubble grow older over time as the national birth rate slowly drops.

But analysts say policy makers and businesses alike have, until only very recently, largely ignored the challenges posed by an aging society.

Now, as the data piles up, reality is dawning at every level of government that the effects of aging are pervasive, reaching into almost every area of policy making, and — by extension — into the daily lives of most people in Canada, young and old alike.

"We have to think about it everywhere, in everything we do, including government, including business," said Lynn McDonald, director of the Institute for Life Course and Aging at the University of Toronto.

From the kinds of sidewalks that municipalities build to the scope of national social programs, aging has begun to dominate every corner of decision-making. And nothing illustrates the enormous impact of aging on policy making better than old age security.

Tough choices yet to come

With the stroke of a pen in the last budget, the federal government essentially raised the age of retirement — and immediately threw companies, policy makers and normal people saving for retirement into a scramble.

'The baby boomers, and up-and-coming older people, are going to have to care for themselves.' —Lynn McDonald, Institute for Life Course and Aging

By raising the age of eligibility by two years, Ottawa has knocked personal financial plans off kilter, prompted middle-aged people to rethink their career paths, started a policy review in many different government departments with benefit programs tied to OAS, and launched fiscal negotiations with the provinces.

The change will also force financial institutions and institutional investors back to the drawing board to reconfigure pensions and long-term investment strategies, since anything now tied to age 65 is up in the air.

It will take years to work out all the cascading changes, said Malcolm Hamilton, a pension consultant with Mercer Human Resource Consulting Ltd.

"It has created a bit of a nightmare from a planning perspective. Unless you were really confident in your ability to plan, I think this is a good time to say, 'Let's just sort of continue business as usual for a few years in the hopes that some of this settles down."'

Turmoil aside, the move has also helped set federal finances on a firm fiscal footing for decades to come, giving Ottawa more room for spending elsewhere in future decades.

But even though governments have known for 30 years that the demographic bulge would be retiring now, the tough policy decisions have yet to come, said economist Chris Ragan, a professor at McGill University in Montreal.

In a recent analysis, Ragan predicted that rising age-related costs associated with elderly benefits — especially health care — would mean an extra $56 billion a year in public expense, in today's terms.

While Ottawa has made a start in tackling elderly benefits, there has been scant attention paid to the effects of aging on caregiving, tax policy, health care delivery and labour force participation, Ragan notes.

National conversation needed

Indeed, the next tranche of census data will show clearly how the size of the workforce is changing as society ages and the birth rate stagnates.

A smaller workforce in the future will mean the continual advances in standard of living that Canadians expect will be a thing of the past -- unless major changes are made in the way companies and workers do business.

It's slowly dawning on baby boomers that there are so many outstanding issues in the public sector and in the workplace that governments won't be able to keep up, said McDonald.

"The baby boomers, and up-and-coming older people, are going to have to care for themselves."

Financially, they will have to save more than in generations past, and learn to navigate financial markets, since that's where their savings are.

And in health care, they are going to have to learn about managing chronic illness, dementia and improving their diets, since the health care system as it exists today is more focused on acute care.

Women in particular are going to have to figure out ways to handle mounting care-giving responsibilities even as they stay in the workforce longer, McDonald said.

The census will serve to confirm the long-term trends, clarify the exact configuration of the workforce and retirees, and — she hopes — prompt a national conversation on changes that need to be made to accommodate the aging population.

"Finally people are going, 'Oh my goodness, we have more older people than children under 15. What a surprise!"' she said sarcastically.

"It's an enormous issue, and an enormous task."