As the Ontario election kicks off, party leaders have two paths to majority government: convince Ontarians who voted for a different party last time to switch, or convince Ontarians who didn’t turn out in the last election to vote this time. Because fewer than one in two Ontarians cast a ballot in the last provincial election, the second route holds promise. Attracting even a modest portion of this large group could win any party a majority.
We know that Canadians who abstain from voting are disproportionately under age 45. Many in this group tune out from politics because political parties tune them out.
Consider Ontario’s budget last week. After analyzing health, education and social service expenditures by age, the Generation Squeeze campaign calculates that the provincial government plans to increase annual spending by $1.5 billion for the 2.3 million citizens age 65-plus. By contrast, despite announcements about the Ontario Youth Jobs Strategy and the Ontario Child Benefit, the government budgets next to no new money for the 7.8 million Ontarians under age 45 ($12 million, or less than 1 percent of the added spending on retirees. See the Table below for further detail).
This is not a partisan issue. The Conservative and NDP leaders did not trigger the June election by rejecting the Liberal budget on the grounds that it invests in the aging population at the expense of Ontarians in their mid-40s and younger. No one questioned whether this generational division of spending is an appropriate response to the fact that younger Canadians pay housing prices that are nearly twice what they were in 1976 (after adjusting for inflation) with annual earnings that are down thousands of dollars, often despite more years of post-secondary.
There is no doubt the aging population and the socioeconomic decline for younger Canada both pose major societal challenges for which solutions are needed. Yet heading into this election, Ontario’s three major political parties propose to address only the first challenge, not the second. Their visions for Ontario will sustain the combined provincial and federal pattern of spending over $40,000 each year per retiree, while doing little to adjust upward the annual allocation of just $12,000 per person under 45.
There is hope that Ontario may yet adapt for all generations. Notably, the Premier boldly proposes an Ontario Retirement Pension Plan (ORPP) that aims to address the inadequate amount of retirement savings. This is a growing problem for younger generations squeezed by lower earnings and higher costs.
But we won’t ease this squeeze if governments fail to address the root cause. Insufficient saving for retirement by Canadians in their mid-40s and younger is not primarily a problem of failing to plan for our future. We are not saving enough because the gap between income and costs is far larger than a generation ago.
In 1976, the typical 25 to 34-year-old had to work full-time for five years to save a 20 percent down payment on an average home. Facing housing values that are higher and earnings that are lower, it now takes 10 years. For many, the 10 years only start after years of post-secondary education to compete for jobs, and paying higher tuition for the privilege. Is it any wonder that younger Canada is saving more slowly for retirement?
We have to implement new pension policy alongside policy measures that reduce current cost pressures facing young adults. Otherwise, as the ORPP garners a larger share of young people’s earnings for later retirement, it risks exacerbating the present squeeze for a generation in its prime child rearing years in order to minimize a later squeeze as seniors. The Ontario proposal to add $1.5 billion more for those age 65 and older with no increase for the much larger group under age 45 does not strike this balance.
The current failure of all Ontario political parties to question the age gap in government spending underscores why the Generation Squeeze campaign is building a powerful organization to speak up for younger Canada – one that influences politics for the selfie and stroller crowd to complement what CARP (the Canadian Association of Retired Persons) does for Canadians age 50+.
As Ontario political leaders release their platforms, Generation Squeeze will monitor how each party proposes to spend on retirees as compared to younger generations. Parties that propose significant policy adaptations for the latter while protecting our aging family members are especially likely to attract to the ballot box the biggest share of abstainers from the last election.
That’s a promising path to move from minority to majority government.
Dr. Paul Kershaw is the Founder of Generation Squeeze (gensqueeze.ca), and a policy professor in the University of BC’s School of Population Health