John Ibbitson is a writer-at-large for The Globe and Mail. His latest book is Empty Planet: The Shock of Global Population Decline, co-authored with Darrell Bricker.
The oldest of the baby boomers will turn 75 next year. The generation that defined us all, that fought for peace and cheap drugs and no-fault divorce, that gave us the personal computer and the internet and the culture wars and the war on terror, that is responsible for the best and the worst of the human condition as we live it today, is getting old. And as always – always – they’re making it all about them.
The boomers are living inconveniently long lives. Over the course of the next three decades, the number of people aged 85 and older will more than triple.
“More and more people are living into their 80s and 90s than were ever expected to,” says Parminder Raina, Canada research chair in geroscience at McMaster University. “The rapidity of aging is the real issue for policy makers.”
And just as you’d expect, the boomers haven’t saved enough. Which means looking after them will cost younger generations a great deal of time and money.
Worst of all, because the boomers were also the first generation to stop having enough children to replace themselves, there are fewer young people available to look after the old.
Every generation is having fewer children than the generation before. Things are going to be even harder for Generation X. And harder still for the millennials.
“This is a fundamental, paradigmatic shift in society, and for too long we’ve buried our heads,” says Michael Nicin, executive director of Ryerson University’s National Institute on Ageing.
This isn’t some abstract policy challenge. This is about us, caring for our parents or our spouse. This is us, worried about our children’s future. This is about everyone getting older every day, with not enough money to pay for it.
Unless governments, families and individuals act now to bend the curve on the cost of aging, many of us will not enjoy our later years.
When the pensions and public health-care systems that Canadians rely on today were first put in place in the 1960s, the life expectancy of a man was 69 years, just four years after he was likely to retire. But a man who turns 65 today will live, on average, another 19 years, and a woman will live another 22 years, according to Statistics Canada.
And longevity continues to increase. The fastest-growing age group in Canada is centenarians. There are more than 10,000 of them today, three times the number in 2001, and there should be about 40,000 by mid-century.
Over the same decades in which longevity has increased, the fertility rate has decreased. Today it sits at 1.5, half a baby short of the 2.1 children per woman, on average, needed to keep a population stable. If it weren’t for this country’s high immigration intake, Canada’s population would eventually start to decline, just as it is declining or about to decline in dozens of countries around the world, from China to Japan to Italy to Russia.
As a result of increasing longevity and decreasing fertility, Canadian society is aging rapidly. In 1982, the median age in Canada was 30. Today it is 41. There are now more people 65 and older than people 14 and younger in Canada, and that will widen in the years ahead.
“Lower fertility rates are going to mean that services that have traditionally been provided by the family – namely women – will need to be paid for,” says Bonnie-Jeanne MacDonald, who researches family security issues at the National Institute on Ageing. “It won’t be cheap.”
That’s an understatement.
The costs of caring for the elderly will be staggering. By the time someone who is around 40 today retires, long-term-care costs will be eating up about 20 per cent of all government revenue generated by personal income taxes.
And even as those costs go up, Canada’s tax base will erode further because fewer people are entering the work force every year.
"The role of population aging on economic growth might have been underappreciated,” says Colin Busby, a research director at the Institute for Research on Public Policy, a Montreal-based think tank. “It might be an even stronger driver of the decline in economic growth and government revenues going forward.”
Individually, Canadians are ill-prepared for leaving work. Half of all Canadians approaching retirement do not have a workplace pension. The median level of retirement savings for these people is $3,000. No, there isn’t a missing zero.
Three. Thousand. Dollars.
“Canadians without pension plans are not saving adequately on their own using the retirement saving tax-incentive tools given to them,” Ms. MacDonald says.
The cost to governments of caring for older Canadians is set to skyrocket. By 2050, there will be more than twice as many people needing long-term care – care provided outside a hospital. By then, the cost to all levels of government will have tripled, from $22-billion to $71-billion.
Many of those needing care will have dementia. Eight in 10 people in long-term care today have some form of the condition, according to Carole Estabrooks, director of the TREC (Translating Research in Elder Care) program at the University of Alberta. The number of Canadians with dementia is expected to grow from 564,000 in 2016 to 920,000 in 2031, an increase of 63 per cent.
“It’s a huge issue,” she says.
And sloughing off the burden of care onto families will not be an option for any future hardhearted government, because 75 per cent of the cost of long-term care in Canada is already provided, for free, by family members, usually women. And that burden will increase with every passing year.
Almost all of the overworked, underpaid personal support workers in nursing homes are also women. Their work is greatly undervalued. “It’s personal support, it’s companionship,” Prof. Estabrooks says. "It’s helping the people they care for have a good day, have a good moment, trying to ensure they get some small enjoyment, some pleasure out of life. And that’s the kind of stuff that tends to get shorted.” But as labour shortages increase, wages are bound to rise. In any case, whether paid or unpaid, with every year there will be more people needing care and fewer people available to provide it.
Try The Globe and Mail’s calculator to find out how much of your working income you’ll need in retirement.
At this stage, most Canadians aren’t prepared to accept realistic measures to rein in the increasing costs of an aging society. One measure would be to raise the age of retirement. With most Canadians healthy into their 80s, pensioning someone off at 65 is like giving them a paid vacation.
But when Stephen Harper’s Conservatives raised the age for receiving Old Age Security from 65 to 67, the howls prompted Justin Trudeau’s Liberal government to drop the age back to 65. In any case, whether through financial need, poor planing or both, many Canadians start taking Canada Pension Plan benefits when they turn 60, even though the long-term benefit is lower than it would be if they waited till 65 or, even better, 70.
Another approach might be to forcibly unlock the wealth accumulated by older Canadians. In the United States, according to a report in Forbes magazine, the silent generation (people over 75) held about 1.3 times the amount of wealth of boomers, more than twice that of Gen Xers and 23 times that of millennials. Equity built up in real estate accounted for much of the discrepancy.
Instead of giving seniors discounts and tax breaks, perhaps it’s time to ask them to pay the full costs of the health and long-term care they receive. Such a proposal would be political suicide, however, since there are so many seniors, who historically have been more likely to vote than their millennial counterparts.
One way to help smooth the aging curve might lie in recruiting skilled young immigrants to replace the missing workers from the dearth of births. And Canada is doing exactly that. There were more than 570,000 people in Canada on student visas at the end of 2018, almost 75 per cent more than in 2014. Many of these students can apply for permanent-resident status after graduation.
But immigration can have only a limited impact on societal aging, in part because immigrants often apply to bring their parents over as well. And opening the immigration floodgate beyond the 341,000 that Canada is expected to take in this year could provoke strong opposition from the native born. The populist Coalition Avenir Québec government in Quebec, for example, is cutting back on immigrants and requiring new arrivals to take a Quebec values test.
Another approach to coping with the costs of aging has barely registered with most people: long-term-care insurance. As with other forms of workplace insurance, workers and employers would make contributions toward a fund that would cover the costs of home care, assisted living, nursing home and palliative care when they need it later in life.
There are plenty of questions: How much would it cost? Would older people today be eligible to receive the funds, or would only those who had contributed for decades qualify? Several countries, including Germany, already have such a program in place, which could serve as a template.
At McMaster University, Prof. Raina would like to see long-term-care insurance or other forms of government support for people who must work less in order to care for someone who has dementia or other intensive needs. He is also a strong proponent of care centres for the elderly, where caregivers can drop off their charges for part of the day while they work or just take a break.
“I think some kind of respite care that is based in the community is really, really important,” he says.
Prof. Estabrooks at TREC emphasizes the need to help seniors “age in place.”
“We’ve got to enhance community supports, and home care is probably the biggest one,” she says. But what matters most is moving from this study and that pilot program to full-scale initiatives. "We can do this by tackling each problem one solution at a time.“
In the Toronto area’s heated housing market, three women over 80 face hard choices about whether to stay or go. Photographer Emma Kreiner tells their stories.
Without long-term solutions to the fiscal challenges of an aging society, intergenerational tensions are likely to rise. In some countries, those tensions are already severe.
In December’s British elections, English attitudes toward Brexit – with supporters of leaving the European Union inclined toward the Conservatives and opponents toward most other parties – were defined by age more than by geography or class. The youngest voters most fiercely opposed Brexit, and the oldest most fervently supported it, no matter where they lived or what their income.
“Age is now one of the key dividing lines in British politics,” said Gideon Skinner, public affairs research director for Ipsos MORI. In the election, according to the British polling firm, Labour had a 26-point lead among 18-to-34-year-olds, while the Conservatives had a 37-point lead among people 65 and older.
Some believe younger voters are more socially tolerant than older voters. But that isn’t entirely true. "Younger generations are generally far more accepting of diversity of gender, race, religion as compared with an older generation,” observes Lorraine Mercer, a professor of gerontology at Huntington University, which is part of Sudbury’s Laurentian University. "And yet, I don’t think they’re as accepting of older people. All the stereotypes of older people they still buy into.” Ageism – discriminating against a person because they are older – may be the last barrier to full diversity.
Although, as Prof. Raina says, ageism spans the generations. “Older people can be ageist toward other older people.”
There is, however, one massively important, although impossible to quantify, counterbalance to the prospect of growing intergenerational tension: love.
As Mr. Nicin points out, children want their parents to live long and healthy lives. And parents are anxious not to be a burden to their children. Whatever the official age of retirement, many people are working past 65 of their own volition. Pension experts are exploring new options to encourage retirement savings.
“We are all worried about each other,” Mr. Nicin says. “We all care for each other.” He expects to see an increase in intergenerational housing over the years, as children, parents and grandparents lean on one another for support. “The more we depend on each other, and not on the state, the better off we are,” he believes.
For as long as we can foresee, there will be more older and fewer younger people among us every year. If we are to live well, we must care for one another, however old we are and whatever we may need.
Photo illustration by The Globe and Mail