In my column today I take a look at the fiscal consequences of the significant demographic shift in New Brunswick that is currently underway. We have had a steep increase in the population aged 55-64 (over 50%) and they will be sequentially retiring in the next 10 years (most of them, NB has the second lowest percentage of working for pay seniors in Canada).
By contrast the population aged 65 and over has only increased 20% in the past ten years. There will be a dramatic rise in retirees – and as I show – they are moving out of their prime tax paying years into prime health care services utilization years. A dangerous fiscal mix for government.
For people who think the current fiscal situation is no different than what McKenna’ faced in the early 1990s or Hatfield in the 1980s, think again. Add on top of that 3 times as many people moving into retirement and a negative growth rate of young people.
Throw on top of that a Canadian dollar at par with the U.S. (it was 65 cents during much of McKenna’s recession), rising wage costs and a tight labour market.
Fun times to be sure.