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Paul Kershaw: The B.C. budget highlights just how expensive the Boomers’ retirements will be

Commentary

Last week’s B.C. budget features a hard truth that, until now, had been swept under the carpet in the province and elsewhere across the country. Previous governments did not prepare adequately for the medical care Baby Boomers consume in retirement.  

This lack of preparation is a driving force behind B.C.’s $7.9 billion deficit.

Just whispering this hard truth has been judged too politically risky for years—in part because of the “politics of gerontocracy” described by Hub editor-at-large, Sean Speer. So Premier Eby deserves full marks for political bravery and honesty in his government’s budget document.  

Now all provincial governments should take note because the same honesty will be necessary to regain control over their revenue and spending pressures. Here’s why.

“Continuing to provide high-quality medical care is one of the fastest growing costs facing us collectively, primarily due to our aging population,” explains the B.C. government in its Strategic Plan. “In the 1970s, there were seven working-age adults for every retiree. Now, there are only three. That made it easier in decades past for the Province to cover the medical-care costs of our aging loved ones.” 

By failing to prepare for this demographic shift, past provincial governments made a glaring error. This error could have been prevented by following the example of federal adaptations to the Canada Pension Plan (CPP).

In the mid-1990s, Ottawa recognized that a shrinking ratio of workers to retirees required changes to CPP. To keep the program solvent for future generations, CPP shifted to a prepay system. Under this model, the payments individuals contribute over their working lives are closer to the average cost of CPP benefits they expect to use in the future. The change increased annual CPP contribution rates by 65 percent but ensured the long-term viability of the program.

Unfortunately, provinces didn’t make similar changes to revenue collection for medical care, which remains a “pay as the province goes” system. This means governments collect revenue each year to correspond (more or less) with the cost of the medical care used by residents in that same year.

This lack of foresight means all provincial budgets are now in a precarious position. Boomers dutifully paid taxes according to the rules of the day. But those rules asked them to pay for the smaller percentage of retirees who came before them—not for the full cost of the medical care they would actually use. As a result, those rules now leave insufficient funds to pay for Boomers’ medical care. Either that or unpaid bills for their offspring to pay.

B.C.’s Budget 2024 opts for the latter. Medical care received the largest single-year increase in B.C. history: $4.5 billion in 2024, growing to $6 billion by 2026. About half of this new money will be used by residents aged 65 or older, who represent 20 percent of the population. 

Before the NDP were elected in B.C., Christy Clark’s government managed similar fiscal pressures by reserving new spending primarily for medical care. Since Canadians use more medical care after age 65 than earlier, my calculations estimate that her government grew spending for seniors about four times faster than for those under age 45. 

Premier Eby is charting a different path. “Our government is determined to make B.C. work for all generations,” states the Strategic Plan. “We’re committed to planning for all ages and investing wisely in well-being, from the early years onward.”  

Early signs show B.C. is making real changes to meet this commitment. The age gap in new provincial investment under Eby is less than half of the gap budgeted by Clark. This matters for the finances of younger residents because it means more money for child care, housing, and postsecondary and K-12 education.

Yet as B.C. starts “to grapple with the need to address demographic challenges, while also ramping up investments in young people so they can succeed”, the government’s revenue problem remains.  

Care home resident Suzanne Barrie, 95, listens as B.C. Premier David Eby speaks during a news conference in Richmond, B.C., on Thursday, June 22, 2023. Darryl Dyck/The Canadian Press.

It’s not enough to apply a generational fairness lens to new spending. We also need to apply this lens to how to pay for government investments. This is a weakness in B.C.’s 2024 budget.

Premier Eby proposes to run deficits over the next three years that are larger than deficits run during the pandemic, even though the province is not in recession.

B.C.’s debt servicing charges were already $3.3 billion last year. They will grow to $5.7 billion by 2026. That’s more than B.C. will spend on child care and housing combined.

By recognizing the decades-long failure of previous governments to raise enough revenue from Boomers to pay for their healthy retirements, the current government correctly acknowledges that it has inherited a structural deficit. 

Now we need the Premier to be brave enough to engage British Columbians in a hard truth conversation about how we, and especially affluent Boomers, pay for the services we want. 

Ginny Roth: Your freedom to watch porn doesn’t trump our duty to protect children

Commentary

Pierre Poilievre declared early last week that his party supported limiting child access to online porn. The news was breathlessly reported, the X analysis began, and it only took about 48 hours for the debate to shift from differences in principles and worldviews into a “well, actually” scuffle over technocratic implementation challenges.

Why was that?

As libertarians (of all partisan stripes) took to social media to mock Poilievre on principled grounds, I suspect that in making their arguments, they found their own messaging rather unpalatable, or at least they realized most Canadians would. You can just imagine how the thought process went. “HA!”, they thought to themselves. “Mr. Freedom himself isn’t so interested in all those freedoms, is he??” (So far so good). “I guess his consistent worldview isn’t so consistent after all!” (How embarrassing for him!) “I guess he doesn’t feel strongly enough about completely unfettered access to highly exploitative and disturbing online content for kids, does he??” (OK, maybe this part needs some spin.)

Because of course children shouldn’t have easy access to porn on the handheld devices they carry with them all day, every day. The very notion is so absurd that the only way to defend it is to change the nature of the argument. Given the necessary implication of a freedom-of-expression-based argument (that the adult right to expression outweighs a duty to protect children), I would probably pivot away from that path of argumentation quickly too. And to be fair, the technical policy arguments against age-gating are far stronger. Poilievre sought to address one of those arguments quickly, his office clarifying that his party would not support a digital ID. Still, implementation would be difficult. We’re not used to regulating the internet and writing policy to address external harms caused by new technology has never been easy. Wise policymakers will no doubt recommend an approach that allows for adjustments as legislation and regulation are tested by real-world applications. 

Age verification will be tricky to implement, and any approach will come with risks. But let’s be clear about what those risks are. They’re not about a threat to freedom of expression. The libertarians put that matter to bed when they realized that arguing a porn star’s (or, perhaps more truthfully, a porn profiteer’s) right to self-expression supersedes our duty to children was a non-starter. For the implementation-is-hard argument, the risks are to the porn companies, and the troublesome red tape they’ll encounter (pour one out for Pornhub, I guess), and, more seriously, to the privacy of adults viewing porn online. Any time adults are required to provide proof of identity in a digital environment, there’s a risk of a data breach. It’s a real problem. But it’s a problem that affects many of our online interactions. Yes, it will be difficult to confirm age.

And of course, gathering personal data carries the risk of a data breach. But as our country increasingly operates online, this is already true. Whether we book plane tickets and provide our passport numbers, log on for some i-gaming and prove our age, or go online shopping and share our credit card numbers, we share data online all the time, taking the risk that our identity or payments might be compromised, and expecting the private sector and government to develop more sophisticated solutions to protect against that as time goes on.

“What about the parents?” you might say. “Why should I sacrifice my right to privacy and risk a data breach just because parents can’t keep their kids off porn sites?” I would direct your attention to the evolving policy matter of smartphones in schools. Some technologically powerful cultural trends are simply too potent for individual parents to push back against on their own. I won’t rehash the harms that early, frequent access to porn has on developing minds at great length, but they are plentiful, and it’s probably fair to say we haven’t yet measured the extent of it given that Gen Z is the first generation to carry social media on their phones, in their pockets, from childhood. Given the knowledge we do have, I think it’s unacceptable for policymakers to simply turn away, washing their hands of the issue and hoping kids come out relatively unscathed.

In high-functioning societies, we trade off rights, privileges, and duties all the time in public policy-making. “Ordered liberty” often requires that the strong in society give up some freedoms in order for us to collectively protect the weak. So, the question becomes, do you think an adult’s absolute right to guaranteed privacy online in every circumstance outweighs our duty to protect children from harmful content? I say no. Assuming we make every effort to protect adult privacy and are thoughtful about the policy design required to do so, we ought to prioritize our duty to protect children from harm. I suspect most Canadians agree with me.