Premier Gallant is Canada’s youngest Premier at age 33. Some might worry his spry age makes him less oriented toward the needs of the aging population. But his 2016 budget shows precisely the opposite. The age break down in government spending reveals that protecting funding for seniors is once again the Premier’s top priority.
The bulk of New Brunswick spending goes to health care ($2.6 billion), grade school and early child development ($1.1 billion), postsecondary and other training ($610 million), along with social services for persons with disabilities, seniors and families ($1.2 billion). After inflation, the provincial government will spend $98 million more in these areas than in 2015 – even as the population declines.
Most of the new spending ($67 million) goes to those age 65+, enabling the Premier to budget nearly twice as much funding for each senior compared to each younger citizen.
Specifically, the provincial government will spend around $11,108 on each of the 148,000 citizens age 65+ and only $6,656 for each of the 374,000 New Brunswickers under 45. When combined with federal and municipal spending, governments spend in total more than $33,000 per person age 65+ compared to less than $12,000 per person under age 45.
Medical care is at the heart of this age gap. 55 per cent of the $2.6 billion health care budget will go to the 20 per cent of the population age 65+. This means medical care for seniors costs more than the entire education and early child development budget, and is more than double all postsecondary, training and labour spending.
As 4,900 more New Brunswickers join the 65+ age category this year, the provincial government budgets an extra $450 per retiree to cover costs that come with aging.
To pay for some of this increase, the government will raise the HST to match rates in Nova Scotia, and increase corporate taxes to match Newfoundland. While the government concedes it has identified a number of options to save money on seniors care, nursing homes and other medical care, it has postponed making any of these decisions until its Council of Aging reports back.
Interestingly, the Premier didn’t punt the decision to trim postsecondary. After inflation, the province will cut $7 million from its budget as one contribution to funding the extra $43 million allocated to senior’s medical care.
While grade school and early child development received some extra funding, the dollars, especially for child care, pale in comparison with the much larger increases in senior’s health care.
All of us with aging parents and grandparents admire Premier Gallant’s efforts to protect spending for retirees. But the age breakdown in his 2016 budget reveals that the recently launched Council on Aging is focused too narrowly. What is really needed is a Council on Generational Equity.
Yes, it’s a big deal for government budgets that 20 per cent of New Brunswickers are age 65+, especially when seniors represent only 11 per cent of Alberta’s population. But this age factor is only one important demographic factor. Equally important is that the typical young person earns around $5,000 less per year for full-time work than did the same age person between 1976 and 1980. Young people earn less today even though they are twice as likely to have postsecondary, and pay $3,200 more in yearly tuition compared to 1976 after adjusting for inflation.
To compensate for lower earnings and to pursue gender equality, New Brunswick women under age 45 work at nearly double the rate of women in 1976. The resulting time and money squeeze for young families today should be mitigated by provincial budgets that invest more in child care services and other work-family balance measures at a level that matches recent increases to medical care. Presently, the province lags near the bottom of international rankings for investments in the generations raising young children along with other Canadian provinces.
Such poor rankings provide all the more reason to revise the Council on Aging’s mandate to include Generational Equity. It’s imperative for New Brunswick to work for all generations at the very moment the number of workers available to support the aging population is in decline.
Dr. Paul Kershaw is a policy professor in the UBC School of Population Health, and Founder of Generation Squeeze