Canada is facing a looming 'geriatric crunch' that could create a staggering $2 trillion liability for provincial budgets, according to a recent report by the C.D. Howe Institute authored by William Robson and Parisa Mahboubi [8b417ddf]. The report highlights the alarming demographic shift in Canada, where the current ratio of seniors to workers is less than 1:3, projected to worsen to 1:2 by 2067. This shift poses significant challenges for healthcare funding and overall economic stability [8b417ddf].
Healthcare costs are expected to rise dramatically, with projections indicating that these expenses will account for 10% of GDP by 2043 and 12.7% by 2067. In Nova Scotia, healthcare costs could reach 20.5% of GDP by 2067, necessitating drastic measures to manage the financial burden [8b417ddf]. The report suggests that tax rates may need to increase significantly, with estimates indicating a potential rise of 56% in Nova Scotia, 43% in British Columbia, and 34% in Ontario and Quebec. Specifically, Ontario may require $723 billion in tax increases to cope with the impending financial strain [8b417ddf].
To address these challenges, the report advocates for a shift from income taxes to consumption taxes and encourages extending the working life of Canadians to mitigate the fiscal impact of an aging population [8b417ddf]. This demographic change is expected to place considerable stress on provincial budgets, highlighting the urgent need for public policy adjustments to ensure sustainable healthcare funding and economic stability in the years to come [8b417ddf].