Tuesday’s budget will show that the federal government has boosted spending far more for programs aimed at seniors than for Canadians under age 45, according to a new analysis from the University of British Columbia.
Paul Kershaw, a professor of policy who founded the Generation Squeeze organization to advocate on behalf of younger workers, said Stephen Harper’s Conservative government will increase spending on programs for retirees by $12-billion between the 2012 and 2017 fiscal years – based on prior budget spending projections – while programs aimed at younger workers will see just $2-billion in new spending in the same period.
“Chances are Canadians won’t hear about this generational inequity in the budget speech,” Prof. Kershaw said.
Generation Squeeze has launched a campaign to draw attention to what it calls Canada’s “generational spending gap,” arguing that governments allocate far more program spending to seniors than to younger families.
The organization says all levels of government in Canada spend about $45,000 annually per person on programs for seniors over 65 compared with about $12,000 on people under age 45. Much of the spending increase for seniors is due to the demographic trend of an aging population plus growing health care costs, which are disproportionately used by older Canadians.
Prof. Kershaw said in an interview that the higher level of spending on seniors is not a bad thing and acknowledges there would never be equal spending on younger people whose needs are lower, but said Ottawa has been neglecting younger workers at a time when their “economic vulnerability” has been increasing due to lower wages and higher living costs compared to the mid-1970s.
“We keep saying the cupboard is bare when it comes to adapting for younger people, but find billions and billions to keep adapting for the aging population,” he said, calling it “an inequity that needs to have a light shone on it.”
His review compares spending on three programs aimed at seniors – Old Age Security, the Guaranteed Income Supplement and the portion of the Canada Health Transfer spent on health care for people over 65 – and compares it to programs primarily used by younger workers under age 45.
They include Employment Insurance and parental leave benefits, as well as child care benefits such as the Canada Child Tax Benefit, the National Child Benefit Supplement and the Universal Child Care Benefit. It also includes spending on the Canada Social Transfer, which represents federal contributions to education and social services costs.
It concludes that total spending on programs for those over 65 will climb to $66-billion in 2017 from $54-billion in 2012 while programs aimed at younger workers will see spending increase to $44-billion from $42-billion.
On a per capita basis, that means funding is expected to increase annually by $220 for each person over 65 and just $19 per person for those under 45.
Prof. Kershaw said that if spending increases on programs for those under 45 were to increase by $1,000 per person per year to $13,000 annually, it would equal $16-billion in new spending – an amount that could “do amazing things” such as creating a national program to provide cheap $10-a-day daycare and increase leave benefits for new parents.
He argues that such programs could save families over $50,000 in the first six years of a child’s life, giving young families more ability to pay down their student debt, pay off mortgages more quickly and save for retirement. Spending programs have been slowly adjusted to benefit seniors programs, he says, but there has been no similar boosts for younger worker programs.
“It will not receive any attention today in the budget speech, but that is exactly what the federal government has been doing in terms of adapting for seniors,” he said.