Canada’s Ageing Demographics Compared to Other Western Nations

17th Aug 2010 Comments Off on Canada’s Ageing Demographics Compared to Other Western Nations

Last updated on July 21st, 2018

In today’s Daily Reckoning, Dan Denning analyzes the age demographics of numerous Western countries to determine the attractiveness of government treasuries. He summarizes the relationship between aging countries and government finances as follows:

Through either low immigration or low birth rates, or a combination of both, aging countries face some grim demographic math. Pension (private and public) pensions are likely to increase even as the tax base shrinks. Taxes go up on younger people. But government borrowing probably increases too, unless benefits get cut. If the borrowing is not from domestic savings (where it would then NOT go to private enterprise) it must be done on global markets at whatever the market price for money is.

Mr. Denning presents numerous US Census Bureau charts showing population tendencies for certain Western countries (and Iran).

I have reproduced some of these to analyze how Canada compares to other Western countries.

The charts show that the anglophone nations tend to not have as noticeable an aging pattern as other developed nations (in this case Italy and Japan).  This suggests that our pension “crisis” will not be nearly as severe as what will be experienced in other Western nations. These nations have traditionally not been as receptive to immigration as have the anglophone nations, and as such their ability to adopt policies to mitigate the effects of an aging population will likely be limited.

Amongst anglophone nations, however, Canada’s low fertility rate – currently 1.6 – results in their being fewer children than in the United States (with a fertility rate of 2.1), Australia (1.8), and the United Kingdom (1.9).

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