B.C. Business Matters:
Kristine St-Laurent >>
Millennial Musings: A Policy Response to an Aging Population
The world is aging. This statement should not come as a shock, especially as it is a visible trend here in BC. Looking back 20 years, BC’s population has become notably greyer since 1995, when the median age was 36; today it is 44. One of the reasons the population is aging is because people are living longer. Two decades ago male life expectancy stood at 75.8 years, and for females it was 81.5. As of 2015, a male British Columbian can expect to live to 80.8 years (a gain of 5 years) and females until 85 (a gain of 3.5 years).
The inevitable aging of the population is further compounded by changes in the ratio of traditional working-age persons to those 65 years and older. In 1995, for every 100 persons between the ages of 25 and 64, there were 23 British Columbians 65 and over. The current ratio is 31.5; 20 years from now, it will have climbed to ~48.
While increased life expectancy is a positive development, it inevitably translates into additional strain on health and social service budgets. As the number of retirees increases, there will be fewer working-age taxpayers to provide the government revenues needed to pay for services. On top of this, a shrinking natural birthrate is also contributing to a more slowly-growing labour force.
Looking ahead, what does this all mean for BC? As more baby boomers retire, increasing burdens (such as taxes, long-term care arrangements, pensions, healthcare— to name a few) fall on the shoulders of younger generations. The challenge does not rest solely on the number of older individuals, but more so on the proportion of older individuals to younger (employed) ones. The status quo for health, social services and employment arrangements is unlikely to be sustainable in the coming decades. 
BC will need to be innovative in responding to the fiscal and wider economic challenges associated with an aging population. Governments and businesses will particularly need to look at policies that can boost labour force participation. This means:
- Flexible work arrangements to retain workers, such as phased retirements, telecommuting, flex-time, and job-sharing.
- Encouraging traditionally “under-represented” groups to participate in the labour force.
- Investing in human capital, particularly through skills development, to encourage workers to stay in the labour force longer.
- Focusing on immigration: by 2030, it will be the only source of population growth for both BC and Canada
A closing thought
It’s important to strike an equitable balance between costs that can be levied upon taxpayers and those that reasonably can be expected to be borne by individuals. Means-tested public subsidies and expanding private insurance and personal savings are additional tools to enhance self-reliance. While younger generations increasingly will be called upon to support, financially and otherwise, a growing proportion of older citizens, the same younger generations will also benefit from the stock of assets and knowledge built up in the economy as well as wealth transfers from those aged 65 and over. Granted, there may be some time delays between costs and the societal windfalls from forthcoming wealth transfers, but it is wise to keep in mind the reciprocal nature of the intergenerational relationship. As a province, our ability to adapt to future demographic shifts will depend on good planning and foresight, an understanding of inter-generational interdependence, and a sense of community.