Canada's budgetary watchdog is warning that a rapidly aging population could cause big government deficits in the future if Ottawa and the provinces don't act now to eliminate their long-term fiscal deficits.
Kevin Page says the discrepancy amounts to about 2.7% of the size of the economy in a report outlining the gap between what governments are slated to spend and take in over the next 75 years.
In today's terms, that represents a shortfall of about $46 billion.
The long-term fiscal shortfall will come about not because of the current economic difficulties, but because Canada's aging population will put a speed limit on growth, while increasing government expenses.
Page says to eliminate the gap, governments must either raise taxes or cut expenditures or both.
The budget officer warns his report should not be taken as a prediction, but rather a "what if?" scenarios for parliamentarians.
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