Aging in Canada

Looking back at the year 2017 in statistics, Statistics Canada announced that for the first time in the very long history of the census, “there were more seniors (aged 65 and older) than children (aged 14 and younger)” . This gives us the opportunity to look at the evolution of aging in Canada, with the same statistical sources as we used to analyze aging in Japan and Sweden, in previous posts.

The chart below, in support of Statistics Canada’s announcement, is very interesting: it shows the great diversity of demographic situations in Canada. In Quebec and the four Atlantic provinces, as well as in British Columbia, the proportion of people aged 65 and older is significantly higher than the population aged 14 and younger. In Ontario, this is also the case, but, in this province as in Canada as a whole, it is a change that appeared with the 2016 Census. In all the other provinces, and even more markedly in the Territories, the young population still largely dominates the elderly population.

Let’s turn to the development of aging in Canada as a whole. The chart below shows that we are now in a phase of accelerating aging during the period 2010-2030: in these twenty years, the aging index would increase from 14.2% to 23.3% (in conditional form as part of the period is covered by a projection), an increase of more than nine percentage points! [1] This represents a rate more than double what we can observe in Sweden over any period of same duration, past or projected, but still down two to three points on the Japanese “performance”, the world champion. This is happening in Canada as a result of the dramatic increase in the number of children between 1950 and 1970, who are now crossing the line of the threshold age of 65 – a phenomenon, of course, strongly accentuated by the equally significant increase in life expectancy.

Let’s look at how have evolved the main parameters underlying aging, i.e. the fertility rate and life expectancy evolved.

In 1960, key to the rapid increase in the youth population, the fertility rate was 3.9, one of the highest rates among the OECD countries of present time [2]. Remember that it was 2.2 in Sweden and 2 in Japan that year! Subsequently, Canada’s fertility rate declined rapidly to below 2 in 1973. It then remained below 2, reaching its lowest point (1.5) in 1998, then stable at that low level until 2005. It only slightly increased to 1.6 by 2013. With a low fertility rate for such a long period, we would have expected a pronounced negative impact on the young population.

To understand why it did not have such a negative impact, it is particularly important in a country like Canada to consider another factor that ultimately has a very significant impact on the progression of aging. Here we want to talk about the role of immigration [3]. Incoming migrant flows support growth of the young population and the working-age population. In the medium term, a higher birth rate among immigrants than among established residents supports the growth of the youth population. In Canada, the annual flow of immigration is intense, averaging 0.73% of the total population over the period 1995-2014. The age composition of the immigrant population is significantly different from that of the host population: during the 2011-2016 inter-census period, 17.8% of newcomers were under 15 years of age (16.8% in the host population) and only 4.6% were 65 or older (16.3% in the host population) [4]. When searching for these data, we did not expect the following finding: in the period 2000-2013, Sweden experienced almost as much immigration as Canada – 0.7%, with a stronger growth that this average since 2006. It is certain that such a significant migratory flow has slowed down the evolution of aging in Sweden, which we did not note in the review we devoted to this country. No such surprise for Japan: the immigration rate is very low, 0.06% on average between 1998 and 2013, with almost no bearing on the progression of aging.

What about the impact of the second driving force of aging, i.e. life expectancy, in Canada?

From 1961 to 2013, in 52 years, life expectancy at birth in Canada has risen from 71.3 years (2.2 years less than in Sweden and 2.9 years more than in Japan) to 81.7 years (almost identical to Sweden and 1.7 years shorter than in Japan) [5]. The increase in life expectancy by 73 days each year, on average, in Canada was faster than in Sweden (58 days), but slower than in Japan (105 days). As a result, it is actually around 2015 that the proportion of people aged 65 and older has exceeded that of 14 years or younger in the population. This phenomenon occurred between 2000 and 2005 in Japan and just after 2005 in Sweden.

The increase in life expectancy at birth synthesizes decreases in mortality at all ages. By comparing gains in life expectancy at age 65 and in life expectancy at birth, we can see the relative weight of the benefits of mortality reduction from age 65 on in the total gains in life expectancy calculated at birth. In Canada, men aged 65 years could expect to live another 13.5 years in 1961 [6]. In 2013, they could expect to live another 19 years. The resulting gain of 5.5 years of extra life can be compared to the life expectancy gain of men at birth over the same period, i.e. 11.2 years. This tells us that 49% of the increase in life expectancy at birth is due to longevity gains beyond 65 years. How does this ratio compare with that of women and that in other countries? In Canada, this ratio is 56% for women, meaning that over the additional 9.6 years of life expectancy gained between 1961 and 2013, 5.8 years were obtained beyond age 65. Gains in life expectancy at birth and at age 65 for both men and women were higher in Canada than in Sweden, but in both cases, male and female, the share of gains made beyond age 65 was lower – in Sweden, 56% for men and 68% for women. As we saw for Japan, life expectancy gains were all the largest, and the contribution of life expectancy gains beyond age 65 was 51% for men and 63% for women.

Let’s conclude with a look at some of the implications of aging on the Canadian labour market:

• The working-age population (15-64 years) as a proportion of the total population reached its highest point in 2008 with a ratio of 69.5%. It has declined since that date. This is an important indicator because it gives a measure of the potential burden that young and old populations represent on this “more productive” population: the higher this ratio, the better the capacity to support populations requiring services with limited capacity to generate the resources to obtain them. A decrease in this ratio is a challenge for public policy. Let’s remember that it has been decreasing since 1992 in Japan and since 2007 in Sweden.
• Despite the decline in this ratio, the working-age population continues to grow in Canada and this continued growth is projected for decades to come. Hence the labour force will continue to grow if the participation rate is maintained.
• In 2016, the labour force was at its highest level ever, with an activity rate of 76.2% [7]. This rate had reached a peak of 78.4% in 2008 – showing an existing, but limited, flexibility to cope with the increasing social charges that accompany aging.

References

[1] United Nations, Population Division, Department of Economic and Social Affairs, World Population Prospects: The 2017 Revision.

[2] OECD (2018), Fertility rates (indicator). doi: 10.1787/8272fb01-en (Accessed on 25 January 2018).

[3] OECD (2018), Permanent immigrant inflows (indicator). doi: 10.1787/304546b6-en (Accessed on 25 January 2018).

[4] Statistics Canada (2017), Immigrant status and period of immigration, 2016 counts, both sexes, age (75 years and over), Canada, provinces and territories, 2016 Census – 25% Sample data, 2016 Census. Link (Accessed on 25 January 2018).

[5] OECD (2018), Life expectancy at birth (indicator). doi: 10.1787/27e0fc9d-en (Accessed on 25 January 2018).

[6] OECD (2018), Life expectancy at 65 (indicator). doi: 10.1787/0e9a3f00-en (Accessed on 25 January 2018).

[7] OECD (2018), Labour force participation rate (indicator). doi: 10.1787/8a801325-en (Accessed on 25 January 2018).

 

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Non solum data – Data sine monito oculo nihil sunt.

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