The Implications of an Aging Population for Government Finances in British Columbia
— Published on November 23, 2021
- Seniors currently compose 19.2 percent of British Columbia’s population, and their share of the province’s population will continue to grow and reach nearly 26.0 percent by 2043.
- This will drive increases in health care spending and slow growth in revenues, while imposing adverse effects on the provincial economy. The risk of future recessions, rising interest rates, and other unexpected events will only compound problems further.
- Health care expenditures are estimated to increase by approximately 4.2 percent annually from now until 2040/41. Put differently, BC’s health care spending will increase from 7.6 percent of GDP in 2019 to 8.6 percent in 2040.
- The aging population will exacerbate challenges for BC government finances and projections suggest the province will not see a balanced budget before 2040 at the current trajectory.
- BC is expected to run primary deficits (excluding interest costs) equivalent to between 0.2 and 0.7 percent of GDP, absent a change in spending or tax policy.
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