Immigration will help alleviate Canada's aging population challenges
However, population growth alone will not completely offset the effects of aging demographics, according to a new Conference Board of Canada report.
Currently, Canadians aged 65 and over make up about 16 percent of Canada's total population. Over the next 20 years, this figure will continue to rise to over 24 percent. As baby boomers leave the workforce, Canada's labour supply growth will be limited and economic growth will be constrained.
All else being equal, this will result in economic growth slowing from the already modest current trend of 2 percent to around 1.6 percent by 2050.
In addition to the impact on the labour market, an aging population will also put a major strain on health care and Canada's retirement income support systems.
Without significant changes to how health care is delivered in Canada over the next 20 to 30 years, the share of government revenues directed to health care is expected to rise from 37 percent today to 44 percent.
With the provinces already struggling with large deficits, this added burden would be unsustainable. ■