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Gabriella Makar, MBA
RE/MAX Elite
14717 40 AV, Edmonton, Alberta
P: 780-819-7877
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Tuesday, June 28, 2011 - Alberta's Youthful Advantage

Canada’s population is slowly aging and with it there are a number of unavoidable consequences, chief amongst them being that the dependency ratio (non-working age population relative to the working age) will increase substantially. But of all the provinces, Alberta will have the best relative transition.

Why is a rising dependency ratio a problem? Governments are concerned with this ratio because their two largest expenditures are consumed predominantly by the young and elderly (healthcare and education), while their revenues (taxes) are paid disproportionately by the working population. Ultimately, a growing tax-burden that is shouldered by fewer workers isn’t sustainable.

Alberta is in a better relative position due to two factors, the population has continued to reproduce at a faster rate and the average age of migrants to Alberta has been lower
than the national average. So while they’re closing schools in rural areas of the Maritimes, they’re having to open new ones in Alberta. The infrastructure is expensive, but there’s a demographic dividend as well.

Higher immigration is unlikely to solve the problem. According to recent research by the CD Howe Institute, to completely resolve the demographic deficit Canada would have to accept 2.5 times more immigrants than it currently does to keep the labour force from declining.

The decline of General Motors was accelerated by its high dependency ratio (too many retirees being supported by too few workers) and the recent work actions at Canada Post and Air Canada also centre on future pension obligations. Going forward the rising dependency ratio will increasingly be an issue that shapes debate.*

*Courtesy of Will van’t Veld, Economist, ATB Financial

posted in General at Tue, 28 Jun 2011 17:00:46 +0000

Data last Updated: 2021-01-24 at 03:02:21 GMT America/Edmonton
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