THE CANADIAN PRESS TORONTO – Ontario’s economy may be challenged over the next 20 years by an aging population and shrinking workforce, a new government report suggests. Seniors will account for 22 per cent of the population by 2030 – up from the current 13.7 per cent – putting more pressure on Ontario’s health-care system which already accounts for nearly half of every dollar the government spends.
Meanwhile, the growth in Ontario’s working-age population will shrink to 61.5 per cent from the current 69.4 per cent, according to the report released Friday. Slower population growth and an aging population suggest that there may be slower economic growth than Ontario has experienced in the past, making capital investment and productivity growth more important for future prosperity, the report said. Ontario is already seeing the effects of its aging population in the growth of health-care spending over the last few years, said Finance Minister Dwight Duncan.
“Seniors will account for a bigger percentage of the overall population – that has obvious consequences for health-care costs and so on,” he said. “So I think it’s important to keep these things in mind and as part of the discussion. The shifting demographics also provide “a very good indication of the kinds of things that governments today need to begin addressing will be very front-and-centre down the road,” such as pension reform, he said.
“One of the reasons I’m so focused on post-retirement income is because of health-care costs and long-term care costs,” he said. “Are people in our age group planning well for their own elderly years?”
The study projects that Ontario’s average real GDP will grow 2.6 per cent over the next 20 years and its exports to other countries will almost double by 2030, although the United States will remain its largest trading partner. Immigration will continue to drive Ontario’s population growth, which is expected to add another 3.7 million people and reach 16.7 million by 2030.
In 20 years, more than half of Ontario’s population will live in the Greater Toronto Area, the report predicts. Ontario’s Long-Term Report on the Economy provides insights into what may lie ahead for Ontario and explain trends to help with long-term planning, Duncan said. But it isn’t a policy document and doesn’t provide any new guidance on what the government plans to do to address the province’s long-term challenges.
“Every once in a while, it’s important I think to sit down and look and see what the long-term trends are,” Duncan said.