Lack of age-based data allows Ontario budget to avoid acting on key fiscal challenges

Ontario’s 2025 budget projects a $14.6 billion deficit. It’s striking that this shortfall is so close to the $14.9 billion increase in medical spending on residents over age 64 since Premier Doug Ford took office in 2018.

The parallel is no coincidence. It reflects a larger, yet mostly overlooked, truth. The fiscal pressures created by our aging population are driving Ontario’s red ink – as they are for many governments across Canada. Unfortunately, Ontario’s latest budget gives this reality little more than passing mention. More attention is given to addressing aging physical infrastructure than the rising costs of caring for aging Ontarians.

The primary driver of Ontario’s deficit is easy to obscure when the province continues to fail to report the age breakdown of public spending. That leaves organizations like Generation Squeeze to piece together the numbers – and hope a few curious readers take notice.

This isn’t just an oversight. It’s an institutional failure to publish data that would expose some of the most important trends shaping our fiscal future.

Failing to consider public spending by age is willful blindness to the scale of a challenge brewing for decades

Transparent age-based reporting would reveal the scale of the shift underway. During Premier Ford’s tenure, the increase in medical spending for the 18% of Ontarians over age 64 has outpaced the increase for the remaining 82% of the population. It also rivals the combined growth in funding for K–12 education, postsecondary institutions, and all social services.

These are not marginal reallocations. They are structural, generational shifts.

It’s time for all governments to shine a light on how age dynamics are reshaping our fiscal foundation. This means regularly disclosing how provincial spending patterns vary by age – and what those patterns imply for deficits, debt, and intergenerational trade-offs.

Adequate reporting would incorporate National Health Expenditure data from the Canadian Institute for Health Information, which show that Canadians consume more medical care after age 65 than in their first six and a half decades.

Government reporting must also confront the sharp decline in the ratio of retirees relative to working-age residents. When boomers entered adulthood, there were seven workers for every retiree. Today, that ratio has dropped to just three workers per retiree. Back then, many hands made light work. Now, Millennials contribute 20 to 40 per cent more in income taxes toward boomer retirements than boomers did for the retirees who came before.

Ontario’s liability for failing to plan for the cost of boomer medical care? $723 billion

Governments knew decades ago that population aging would create serious budgetary pressures. Ottawa responded in the late 1990s by adapting its revenue strategy for the Canada Pension Plan. But provinces failed to take similar steps for health spending, missing the chance to build reserves from boomers during their peak earning years to cover the predictable medical costs of retirement.

As a result, we now face a clear, and very specific, revenue problem to meet the medical care needs of our aging loved-ones. A recent C.D. Howe Institute study estimates that this failure leaves Ontario with a $723 billion liability over the next 45 years – and a staggering $2 trillion liability across Canada.

The Ford government’s new three-year fiscal plan is already showing clear signs of strain even before giving any attention to this looming fiscal hole. Despite mounting demands for improved services – including better access to timely medical care – budget 2025 offers little new spending, after adjusting for inflation. Once population growth is considered, real per-capita spending declines across most major budget lines.

Postsecondary education is hit especially hard hit, facing a 10% reduction in total funding over the next three years – before inflation or population growth are even considered. In this way, Ontario’s 2025 budget doesn’t just overlook how demographic change is reshaping public finances. It also sidesteps the growing frustrations of younger residents for whom housing, education, and child care are often out of reach.

It’s not too late to act

Failure to engage with generational trends in public spending and revenue creates social and political risks. During the recent federal election, widespread commentary pointed to a deepening generational divide in Canadian politics. To set us on a course to narrow this growing gap, clear action is needed.

Ontario (and every other province) should launch a Better Late Than Never task force, tasked with developing sustainable plans to fund boomer retirements that treat younger and future taxpayers fairly. The longer we delay, the more the status quo quietly piles up unpaid bills for Millennials and Gen Z – generations already burdened by crushing housing costs.

Ontario (and every other province) should appoint a Minister for Generational Fairness. The province faces difficult choices, but denying the intergenerational tensions driving government deficits won’t make them disappear. It will only delay the honest conversations we urgently need to ensure public finance serves both young and old, now and into the future.