It all happened so fast. Even before my birthday, a letter from Service Canada stated, 鈥淵our Canada Pension Plan Retirement Pension has been approved.鈥
Well OK, I don鈥檛 really need it; but since my employers and I paid into it for four decades, it doesn鈥檛 come from taxpayers.
Soon after came another letter from Service Canada saying, 鈥淲e have approved your Old Age Security Pension.鈥
Old age 鈥 what does that have to do with me? And why should I get the OAS? Four decades of employment and sound investing provide for my security.
But if I had reached age 65 without financial security, I would qualify for both the OAS and the Guaranteed Income Supplement. These programs cost the federal government about $33 billion a year, and the cost is quickly rising.
Service Canada kindly included a card I could use to prove I had reached 鈥渙ld age.鈥 I wondered what it was for, until, standing in line at a pharmacy, the clerk asked the gentleman in front of me if he had a senior鈥檚 card. That magic card meant a 10 per cent discount. I began to notice people were producing the cards for lower prices for movies, hotels, air travel and more.
I haven鈥檛 yet been asked the dreaded 鈥淎re you a senior?鈥 but I鈥檝e already decided to refuse the discount as a matter of principle.
What principle? My business career has taught me that discounts given to any particular group must be made up for by those not receiving the lower price. So accepting seniors鈥 discounts means that others 鈥 younger people working to raise families and make mortgage payments, single parents and struggling students 鈥 have to pay more. (Though I know my one-man anti-discount campaign won鈥檛 matter much, except to me.)
Then there are the government subsidies for seniors, such as transit passes, affordable housing, auto insurance, and reduced health-care premiums. Such programs have merit, but every government subsidy a senior citizen receives has to be paid for by working taxpayers.
Then there is the biggest taxpayer burden of all, 鈥渇ree鈥 health care. Despite unsustainable deficit spending by every province, health care continues to eat into financing education, social services and infrastructure. And older Canadians are the dominant drivers of health-care costs. Our health-care system as we know it is doomed. Ted Fishman鈥檚 recent book, Shock of Gray, shows why.
First, the 鈥渂oomer bulge,鈥 followed by the collapsing birth rates in developed countries, means a rising proportion of senior citizens. We now have five working-age Canadians for every retiree.
Statistics Canada estimates that by 2036, the ratio will fall to 2.5-to-1, meaning there will be only half as many workers to pay for the benefits seniors have come to expect.
Secondly, those seniors have a long, and increasing, life expectancy.
Global life expectancy rose from 20 years in Roman times to 30 in the year 1900. Remarkably, in just over one century, global life expectancy has more than doubled, to 64.
And it鈥檚 much higher in developed countries. Canada鈥檚 current life expectancy is almost 81.
The Canadian Medical Association estimates that 2, 500 new long-term care facilities will be needed to accommodate the expected doubling of Canada鈥檚 65-plus population over the next two decades.
鈥淎n aging world is an increasingly dependent world,鈥 Mr. Fishman writes. 鈥淚t will demand that a growing portion of the population devote their lives to the growing share of the people who need care.鈥
How can pensions for all, subsidized seniors鈥 services, and free health care for all be sustained? The answer is that they cannot be. The shock of the greying of Canada is upon us.
It鈥檚 a shock that will see serious erosion of the support seniors have come to expect unless we focus the dollars on those who need help, and not on those who don鈥檛.
Gwyn Morgan is the retired founding CEO of EnCana Corp.