The revenue governments collect via income taxes is a key way Canadians work together to pay for the programs and services we want. In general, when our tax contributions cover the full cost of things like medical care, income benefits, child care and education, governments can balance their books. When demand for services exceeds the revenue collected, governments run deficits.

Liberal, Conservative and NDP governments across Canada are currently running large deficits. This cross-party trend is a threat to generational fairness, because younger and future generations will be saddled with the bills we leave unpaid today. To help understand why it’s happening, we took a look at how income taxes have changed over the last 5 decades.

Here’s what we found:

Income taxes are lower today than when baby boomers were young.

Because income tax rates are generally lower now than they were half a century ago.

Today’s retirees consume a larger share of the revenue governments collect via income taxes, compared to what we collectively spent on retirees when the baby boom generation was young.

Despite lower tax rates, more tax dollars go to retirees’ medical care and Old Age Security today than half a century ago. This is because the percentage of Canada’s population over age 65 has increased from 8% in 1976, to 19% in 2024.

A larger share of the tax dollars paid by younger people today goes to support retirees, compared to what retirees paid to support older generations when they were young.

The typical 35-year-old now pays around 20-40% more for boomers’ Old Age Security and medical care than boomers paid as young people to support the smaller number of seniors in their day.

Together, these trends result in governments having fewer funds to invest in younger generations — even though these age groups face greater financial insecurity and declining wellbeing. That’s not investing fairly in young and old alike.

Read more in our full analysis

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