Showing posts with label McGill University. Show all posts
Showing posts with label McGill University. Show all posts

How is Canada Going to Handle the Debt from Baby Boomers in 2020?

The Strathcona Music Building, formerly Royal ...Image via Wikipedia“William Robson, CEO and president of the C.D. Howe Institute, reports that Canada will have a liability of $1.5 trillion over the next five decades”
By Pawan Shamdasani, Staff Writer



Canada is recognized for being one of the world’s most indebted countries today by the Fraser Institute. In the past decade, Canada’s national debt reached more than 70% of GDP, but since then successive finance ministers have managed to reduce it down through continued surpluses. However, as thousands of baby boomers approach the retirement line, this will fundamentally change the Canadian labour market and lead to a soaring federal budget deficit.
Since the 1950s, there has been a steady decline in Canada’s birth rate.  Also, there are not enough immigrants arriving. “So the “providing ratio” — that is, the number of working-aged Canadians relative to those over 65 — will fall,” states Matthew McClearn, of Canadian Business magazine. Currently the ratio is 5:1, but experts expect it to decrease to half by 2040.
This will result in an erosion of the tax base as more retirees outnumber the young people who intend to replace them in the workforce. By the next decade, the number of retirees relative to those in the workforce will grow by 7%.
Government spending will rise as the graying population indulge themselves on pensions, health care benefits and old-age benefits, resulting in a fiscal squeeze for Ottawa and the provinces. At the moment, health, education and elderly and child benefits account for 15% of GDP. However, by 2056, these expenses will shoot up to more than 19%.
This represents almost $68 billion in additional government spending each year, which Canada is not prepared to absorb. William Robson, CEO and president of the C.D. Howe Institute, reports that Canada will have a liability of $1.5 trillion over the next five decades.
A combination of fiscal and non-fiscal measures will be necessary to tighten the demographic squeeze alongside policies to enhance labour productivity and make up for the declining workforce. Canada will also require more budgetary discipline which has enabled it to reduce its debt over the past 10 years.
A careful examination of the rising social costs for healthcare and public pensions will be likely as well. But it is clear that many young Canadians will have to work longer before retiring and pay higher taxes than previous generations.
“Permanent fiscal actions – either through increased taxes or reduced program spending, or some combination of both, will be needed to avoid ever-increasing government deficits,” says Kevin Page, parliamentary budget officer. He warns that if corrective measures are not implemented quickly, the problem will grow “exponentially.” If imposed after 10 years, the solution could cost about $30 billion in spending cuts or tax hikes.
These demographic pressures will possibly lead to a grim financial future. At the end of 2008, Canada’s federal debt was about $458 billion. However, Dale Orr, an independent forecaster, anticipates $150 billion in additional government debt until 2014-15 due to the financial crisis. He believes that the financial burden will not be as harsh as in the 1990s.
Christopher Ragan, an economics professor at McGill University, expects the demographic squeeze to be felt largely between 2020 and 2040. He claims that we could be left in a vulnerable situation of rising interest rates and dwindling money supplies that instead could be contributed towards social spending. In other words, Canada would be subject to debt levels similar to the mid-1990s.
The government and politicians need to think long term and realize the risks of changing demographics if we are to save Canada from diving into an era of increasing deficits.
By Pawan Shamdasani, Staff Writer

Canada’s top family-friendly employers for 2011

The Westminster QuayImage via Wikipedia
To create the Top Family-Friendly Employer list for 2011, Mediacorp, which oversees the competition, examined the most progressive and forward-thinking workplace benefits valued by families. These included maternity and parental leave top-up payments, generous vacation and personal days off, flexible work options, emergency daycare support, and childcare costs for employees attending events or business trips.
“Many of these benefits are not big ticket expenses but rather represent an ongoing evolution in how we want to work and an enlightened approach for employers looking to attract and retain their work forces,” says Richard Yerema, managing editor of Canada's Top 100 Employers, including the Family-Friendly competition.
“Less than five years ago, we considered maternity and parental leave top-up over 20 weeks to be quite generous,” he says. “It still is, but we now see more than a few with much more generous top-up, ranging up to 95 per cent for the full year of one's leave.”
The companies in this list are not ranked. They appear in alphabetical order.
Agriculture Financial Services Corp., Lacombe, Alta.: Non-depository credit intermediation; 491 employees. Manages a scholarship program (to $1,000) for employees' children.
BC Public Service, Victoria: General government support; 25,581 employees. On-site daycare centres at some locations.
British Columbia Lottery Corp., Kamloops, B.C.: Gambling industries; 779 employees. Offers fertility drug treatments through its health benefits plan.
British Columbia Safety Authority, New Westminster, B.C.: Regulation, licensing and inspection of commercial sectors; 248 employees. Parental leave top-up for new mothers (to 85 per cent for 52 weeks).
Catholic Children's Aid Society of Toronto, Toronto:Children and youth services; 590 employees. Option of extending maternity leave time for an additional two years.
Edmonton Regional Airport Authority, Edmonton: Airport operations; 276 employees. Parental leave top-up benefits (to 93 per cent of salary for 15 weeks).
George Brown College, Toronto: Post-secondary education; 1,300 employees. Extends its tuition subsidy program to employees' family members.
HP Advanced Solutions, Victoria: Computer services; 377 employees. Maternity leave top-up payments (to 85 per cent of salary for 15 weeks), followed by parental top-up payments (to 75 per cent of salary for 35 weeks).
Human Resources and Skills Development Canada, Gatineau, Que.: General government support; 26,024 employees. On-site daycare centre for returning parents.
Industry Canada, Ottawa: Administration of economic programs; 5,849 employees. Health benefits continue during maternity and parental leave.
ISM Canada, Regina: Computer services; 496 employees. Offers fertility drug treatments through its health benefits plan
Johnson Corp., St. John’s, Nfld.: Insurance; 1,109 employees. Manages a post-secondary scholarship program (to $1,500)
L'Oréal Canada Inc., Montreal: Toiletry product manufacturing; 1,200 employees. Offers early Friday closings in winter and summer.
McGill University, Montreal: Post-secondary education; 5,746 employees. Multiple on-site day-care options for employees (and students) with young children.
Monsanto Canada Inc., Winnipeg: Chemical manufacturing; 270 employees. Offers alternative work options, from telecommuting to informal summer hours.
National Energy Board, Calgary: Administration of economic programs; 335 employees. Maternity and parental leave top-up payments for new mothers (to 93 per cent of salary for 52 weeks) and for new fathers or adoptive parents (to 93 per cent of salary for 37 weeks).
NB Power Holding Corp., Fredericton: Power generation; 2,546 employees. Flexible health benefits that employees can customize.
Office of the Auditor General of Canada, Ottawa: General government support; 698 employees. Gives three weeks of vacation after one year, and offers unpaid leaves of absence for up to one full year.
Saskatchewan Government Insurance, Regina: Insurance; 1,710 employees. Offers post-secondary scholarships to children of employees (to $2,500).
Simon Fraser University, Burnaby, B.C.: Post-secondary education; 4,303 employees. Additional daycare and an elementary school are being developed for the future.
Statistics Canada, Ottawa: General government support; 5,550 employees. On-site daycare centre and emergency short-term daycare services.
Sunnybrook Health Sciences Centre, Toronto: Hospital; 4,825 employees. Parental leave top-up payments (to 93 per cent of salary for 10 weeks).
Toronto Community Housing Corp., Toronto: Residential property managers; 1,412 employees. Compassionate care leave top-up benefits (to 93 per cent of salary for eight weeks).
Toronto Hydro Corp., Toronto: Electric power distribution; 1,519 employees. Organizes a family Christmas party for more than 1,800 guests.
Vancouver City Savings Credit Union, Vancouver: Credit unions; 1,744 employees. Alternative work arrangements including flexible hours, telecommuting, compressed workweek.
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