Abstract:

Canada's demographic situation will undergo significant change in the future. Unless there is an early return to high fertility, the average age of both the population & the labor force will increase substantially, while the overall dependency ratio will be low by historical standards. Analysis suggests that up to about 2010, population change will have less of an impact on the real (ie, constant-price) level of aggregate government expenditures than on the size of the real gross national product. However, compositional changes in government expenditures can be anticipated as a result of population change: very large increases in the real social security costs, lesser increases in health costs, & a reduction in education costs. A relatively large portion of the aggregate expenditure increases will be at the federal government level.