Election campaigns are no time to talk about the issues, as Prime Minister Kim Campbell famously said during the 1993 running of the reptiles.
Despite Campbell’s historic flameout in that election, it seems that the current crop of Canadian politicians agree with her. While we can expect a lot of noisy rhetoric in the next few weeks, our leaders will scrupulously avoid serious proposals about some of the biggest issues on the table: our aging population, Canada’s security relationship with the United States and climate change.
None of these are new issues of course. It’s just that dealing with them is likely to be so uncomfortable that no vote-seeking candidate wants to bring them up. Each is the electoral equivalent of buying your wife a Weight Watcher’s membership for her birthday.
The Green party is a bit different from the others, at least on climate change. But once John Q. Canuck and the rest of the voting public understand their “Vote for us and we’ll raise gas prices!” platform, we will likely see them confirm the logic of Kim Campbell’s quip.
Aging is a particularly big deal. Ben Bernanke, chairman of the US Federal Reserve and not the kind of guy who indulges in hyperbole, described it a few years ago as likely the biggest issue society faces.
To understand why this is, consider a few figures. According to United Nations statisticians, Canada’s old-age dependency ratio was 12 per cent in 1950. This means that for every 100 people aged 15 to 64, there were 12 senior citizens who supposedly “depended” on them for support after work. That’s roughly eight “workers” for every “retiree.” (From the amount of work most of us get out of 15-18 year olds this definition of “workers” may seem strange; the statistics date from a simpler time).
Today in Canada, the dependency ratio is 20 per cent. Given birth rates and lengthening life expectancy, it is expected to head inexorably up to 43 per cent in 2050.
When the Canada Pension Plan was founded in 1965, it was a “pay-as-you-go plan.” This means that each year’s payments to retirees were funded by payments collected from workers that year. That was fine when there were eight or more workers for each retiree.
At first this seemed wonderful. Economist Paul Samuelson described it in 1967 like this: “The beauty of social insurance is that it is actuarially unsound. Everyone who reaches retirement age is given benefit privileges that far exceed anything he has paid in – exceed his payments by more than 10 times (or five times counting employer payments)!”
But this only worked as long as the population was growing. By the 1990s, another economist, Milton Friedman, was describing social security as “the biggest Ponzi scheme on earth.”
You can see this from the numbers above: in the 1950s and 1960s there were eight workers paying taxes for each retiree. In 2050, there will be only about one.
To address this problem, the Canada Pension Plan has been shifted to be partly – but not fully – funded by worker contributions. This solves part of the problem, but the other impacts of aging have not been planned for. They include rising health care costs, slower economic growth, slower growth in tax revenues and labour and expertise shortages.
Imagine how big the provincial health care budgets will have to be when almost half the population is over 65 years.
But don’t expect many candidates to talk about raising the retirement age, hiking CPP contributions further, ending early retirement benefits or changing how health care is financed.
The second issue is our security perimeter with the United States.
Talks are underway about how to harmonize North America’s external border, while easing access between Canada and the United States.
If Poland, Germany and France can agree on such a scheme, the thinking goes, then perhaps Canada and the US could too. This could have important economic and social benefits for Canadians. It doesn’t help anyone when trucks with Canadian built components for Detroit car plants are held up for hours every day at the Windsor border.
Making the border less of a barrier for business (and American tourists coming North) in a way that is consistent with Canadian values and sovereignty should be high on the national agenda. Instead, our politicians are tiptoeing around the issue, probably hoping that the official-level talks remain ignored deep inside the bowels of the Foreign Affairs and Homeland Security departments.
If any politicians bring it up, it will probably be to wrap themselves in the flag and attack the idea on “sovereignty” grounds. That’s always a cheap and easy way to get media attention.
The third issue is climate change. After watching Stephane Dion’s 2008 campaign implode when he proposed a serious carbon tax, the Conservatives, Liberals and NDP will avoid the concept. Instead we will hear about green investments, subsidies for renewable power and insulating your home (if you missed the five previous programs to do this). All worthy stuff, but until the price signal gets stronger we won’t see a serious reduction in carbon emissions in this country.
The Green party is up front about their plan for a carbon tax. They call it Green Shift, and intend to lower income taxes to compensate. It will be interesting to see how the other parties react to this unusual frankness in a political platform. But given voter behaviour, they are as likely to win the next election as Dion was.
But before we criticize our politicians for being superficial and short-term, we should remember that we’re the ones that have trained them to avoid tough issues. Dion can attest to that, wherever he is now.
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels.