Older, More Experienced Workers Desperately Needed

The impact of Canada’s aging population requires immediate action from governments, businesses and consumers to ensure a viable economic future, says a report released February, 2005 by the Certified General Accountants Association of Canada (CGA-Canada). The report Growing Up: The Social and Economic Implications of an Aging Population is the most comprehensive compilation of current Canadian data and recommendations on aging, gleaned from demographic experts in government, the private sector and not-for-profit organizations. The report’s key findings are presented under four distinct headings: Health Systems Pressures Labour Supply Concerns Intergenerational Relationships Social and Private Income Security Programs “As accountants who are business leaders and who operate in multi-disciplinary environments, we believe that economic planning on this issue is critical,” says Rock Lefebvre, CGA-Canada’s Vice-President, Research and Standards. “The financial implications of our aging population require immediate attention while our economy can still support such initiatives.” The report estimates that total health care spending in Canada, adjusted for inflation, will increase to $147 billion in 2020 from $80.7 billion in 2000. CGA-Canada says these upcoming pressures on the health care system can be more easily managed if appropriate planning and action are taken now, while healthy economic conditions and federal budget surpluses exist. Eliminate Mandatory Retirement The Canadian labour market will also be greatly affected by our aging population. In 2001, the median age in the core workforce (20 to 64 year olds) was 41.3 years of age. By 2011, it is projected to rise to 43.7. To ensure a productive society, the report suggests Canada should eliminate mandatory retirement and discourage early retirement incentives. It’s imperative that Canadians understand the benefits of personal financial planning and know the advantages and limitations of existing social income programs. Canadians should take more responsibility for their own personal financial planning to complement government programs. Shrinking Net Worth of Canadians Under 54 The report recommends further study on the intergenerational transfer of wealth as there is limited information available about how future generations will be affected by inheritances. Recent data on wealth among the different age groups reveals that Canadians nearing retirement have experienced significant gain in their net worth, while those under 54 have seen it shrink. Immediate Action Required Positive action in the near term can significantly improve outcomes for the aging population. The association recommends that: Governments establish a ‘seniors health account.’ Mandatory retirement and related incentives be eliminated. The Income Tax Act be adjusted to implement phased-in retirement. Reconciliation of projected increases in public spending with future wealth transfers and increased government revenues from current pension plans. Personal retirement financial planning be encouraged. Canadians must promote policies that provide a minimum standard of living for all. Canadians need more education on social income program benefits and limitations. A national dialogue is needed on ethical issues around dying. Canada should invest in older workers to ensure a viable, skilled workforce. “To maintain Canada’s economic and social strength as our population ages will require strong leadership to change attitudes, policies and practices at all levels,” concludes Lefebvre. “I would like to think that Canada’s aging population presents a wonderful opportunity for us, rather than a problem.”

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