Social Policy in Ontario

Stephen Harper’s census and his vision for Canada

Posted on February 5, 2012 in Governance Policy Context

Source: Globe & Mail — Authors: Joe Friesen

TheGlobeandMail.com – news/national
Published Saturday, Feb. 04, 2012. Last updated Sunday, Feb. 05, 2012.    Joe Friesen

Stephen Harper owes his success in no small part to his mastery of demographics, having tailored his election platform to winning enough seats in key pockets of Ontario and elsewhere to achieve a majority.

Now, the renowned tactician has turned his attention to a grand vision, a once-in-a-generation kind of reform that would change how we save for retirement, whom we admit to the country and how we orient our economic policy.

Speaking in Davos, Switzerland, last week, Mr. Harper said Canada’s aging population threatens our cherished social programs. He thrust obscure stats such as the old-age-dependency ratio to centre stage, promised to overhaul our immigration system and strongly hinted at raising the age of eligibility for old-age security.

These are transformative changes, the kind that can’t be executed without a good deal of persuasion. The Prime Minister will get some ammunition on Wednesday. That’s when the first results of the 2011 census are released. Every census is used for political purposes, but this one will be the most significant in a generation. It will be the evidence Mr. Harper relies on to advance an austerity agenda.

Mr. Harper has indicated that he wants to cut now to prepare for the coming bulge of baby boomers, the first of whom are now turning 65, and whose number and influence will be reflected in upcoming census releases. He will argue that they pose a threat to Canada’s financial security, and their appetite for the pensions and health care they have been promised certainly will prove expensive.

The census will also help Mr. Harper as he seeks to push closer links with Asia. In his Davos speech, he promised to explore other markets for oil after the Keystone pipeline setback, as well as free trade with India. He visits China next week. The westward momentum of the population and its growing human ties to Asia through immigration will create further impetus for Canada’s Pacific reorientation.

The question is whether Mr. Harper can address these national challenges while holding together the hard-won coalition he built into a majority government. After finally persuading enough of Atlantic Canada and Ontario to join his western-based Conservative Party, he could alienate voters in those provinces by turning a deaf ear to local concerns. Atlantic Canada is aging and Ontario’s share of immigration is tumbling. A failure to deal with either of those could have major economic consequences.

At the same time, the aging of the population is tearing at the national compact. The Constitution promises “reasonably comparable levels of public services at reasonably comparable levels of taxation.”

It’s hard to imagine that will be the case in provinces whose horizons differ as much as Alberta and Nova Scotia.

The first volley in this battle was launched last month over health care. The most forceful objection to the Prime Minister’s new deal on health transfer payments – a straight 6-per-cent increase based on population – came from British Columbia. Premier Christy Clark argued that B.C. and Atlantic Canada would suffer if the funding formula did not compensate provinces, like B.C., that have a higher proportion of old people. Meanwhile, Alberta, which has Canada’s youngest population, would be nearly $1-billion a year richer under the new formula.

The straightforward per-capita grant fits with Mr. Harper’s view of a decentralized Canada, where the federal government doles out money and the provinces decide how to use it. The Prime Minister is a bit of a puzzle in this: The same man who told an audience in Switzerland that demographics threaten our social programs was apparently unable to see the sense in a more detailed demographic argument from Victoria.

Gone west

The census will show that population growth in Canada is shifting westward to the resource-rich economies, as it usually does when oil prices are high. Increasingly, that trend seems permanent. In 2010, nearly every city in the West grew at a rate above the national average, while only nine of the 25 cities from Ontario east could claim the same. And while every province worries about the costs of an aging population, some provinces are older than others. To compound their problems, the oldest provinces also tend to be the worst off.

The cleavage runs more or less along the Ontario-Manitoba boundary. In the West, Alberta is a behemoth. It has the highest proportion of people of working age and the lowest proportion of seniors. With a little more than 10 per cent of Canada’s population, it contributes more than 16 per cent to the national gross domestic product. Its median age is the lowest in the country. Once mocked for its parochialism, it now attracts one in 10 immigrants to the country.

Manitoba and Saskatchewan are home to some of the country’s fastest-growing communities. Winnipeg’s share of immigrants soared by 88 per cent from 2006 to 2011, compared with the 2001-06 period. Saskatoon and Regina exploded with immigration growth of 180 per cent and 162 per cent, respectively, in that time. The delivery rooms of local hospitals are also proportionally busier than in the rest of Canada, since the highest birth rates are on the Prairies. Saskatchewan, long a net loser of population, will probably trail only Alberta in population growth this time.

Atlantic Canada, conversely, is by far Canada’s oldest region. Despite some recent immigration gains, the median age is three to four years older than the rest of the country. That bodes ill. All four provinces have median ages well into the 40s, above the national average, with Newfoundland the highest at 43.8.

The future

Consider for a moment what the federation might look like in 20 years when the baby boomers have all turned 65. Somewhere between a quarter and a third of Atlantic Canada will be over 65. The preponderance of white hair on the street will be slightly surreal. There will be about two people of working age to support each retiree. Health-care costs will devour provincial budgets. Nursing homes will be the new fishery. That also has consequences for the younger generation – older voters are less likely to demand investments in education and innovation. Their horizons tend to be shorter.

Meanwhile, Ontario, for so long the linchpin of economic growth in Confederation, is showing signs of decline. It has lost more than 300,000 manufacturing jobs since 2000 and watched its share of the national immigration pie drop to nearly 40 per cent from 60 per cent in just five years. About two-thirds of Canadian population growth is due to immigration, the other third to births (the reverse is true for the U.S.), which is why Ontario has for years been one of the fastest-growing provinces. Those immigrants, typically younger and better educated than the rest of the Canadian population, contributed to the province’s growth and were a sign of its prosperity. Now, Ontario might actually see its rate of population growth drop below the national average, a symbolic threshold.

Quebec has also suffered economically and for years welcomed less than its proportional share of newcomers. As it continues to grow more slowly than other parts of Canada, its relative influence in Confederation dwindles, fuelling its existential angst. The sovereigntist movement might be quiet for now, but will it be in 10 years?

Keeping these regional interests from boiling over will be Mr. Harper’s challenge. His first test came from the premiers on health care. In that case, his vision demanded that every province be treated the same. The danger of that philosophy is it could make them more different than ever.

Joe Friesen is The Globe and Mail’s demographics reporter.

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Tags: economy, ideology, immigration, standard of living

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