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Number of workers to seniors expected to fall to 3-1 by 2027

Shrinking worker ratio

A new study by B.C.'s Fraser Institute forecasts the ratio of workers to seniors in Canada will drop to just three to one by 2027.

The think-tank says the shrinking ratio of workers to seniors is sure to strain government finances in coming years.

As Canada’s population ages, the number of working-aged Canadians relative to the number of seniors has declined from 5.4 in 2000 to 3.4 in 2022.

"(That) means government spending related to demographics is increasing at the same time that the growth in tax revenues is declining," the report states.

"Workers pay the bulk of taxes, which governments need to fund important services, including health care and income transfers to seniors. As the relative number of seniors grows, and the relative number of workers declines, government finances across Canada will be put under increasing strain," says report co-author Ben Eisen.

The study found the share of Canada’s population 65 or older increased from 14.1 per cent in 2010 to 19 per cent in 2022 – and Statistics Canada projects that number will increase to 25 per cent by 2059.

Meanwhile, the working age share of the population (15 to 64) is declining.

"In 1970, the ratio of workers to seniors was 7.8, meaning there were almost eight workers for every senior. This year, that ratio has dropped to just 3.4 workers to every one senior. By 2050, the ratio is expected to decline further to just 2.5 workers for every senior in Canada," the Fraser Institute forecasts.

"As the number of seniors rise, there will be more people collecting income transfers such as Old Age Security and the Guaranteed Income Supplement. Likewise, average annual per person health-care costs for people aged 65-74 is $7,751, compared to just $2,811 for people aged 35-44. This means that government expenses will increase substantially as the number of seniors rises," says Eisen.

"This shrinking ratio ... which is already underway, is a significant headwind to policymakers in their efforts to improve the sustainability of government finances in Canada."



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