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Government should talk budgets with Grandma

By: Paul Kershaw

Posted: 03/12/2013 2:45 PM | Comments: 0

VANCOUVER — March is budget month for the federal government and most provinces. Since medical care is our largest public investment, there is no better place to reflect on our budget priorities than in a hospital.

I write from the Kelowna General where my 97-year-old grandmother is receiving treatment for several chronic conditions. The care is top-notch, from doctors and nurses alike. Three nurses have been particularly helpful. Lyndsay and Erin are tending to my grandmother’s symptoms with kindness and good humour. Julia is helping us plan for my grandmother’s return home, building confidence that we can organize new supports that she may need.

My grandmother relies on the medical system a lot. Last time she was in the hospital, she was stuck in a hallway for days because there were too few beds in the system for seniors with chronic ailments. Compared to that experience, she and I both see the value of new investments. What a difference extra resources can mean, not only for the treatment she receives but also the dignity with which that treatment is delivered. She and I hope that all governments budget prudently this month to protect our country’s cherished medical care system, and to ensure it adapts to meet today’s realities of an aging population in a sustainable way.

But like most grandmothers, my gran doesn’t worry only about her needs. She’s just as concerned about the needs of those who follow her.

She was surprised to learn that Canadian governments annually spend around $45,000 per retiree, compared to around $12,000 per younger person under age 45. Most spending on seniors is through medical care, public pensions and tax breaks to subsidize income in retirement. Important stuff. But what my grandmother didn’t realize is that the average amount spent on health and income security for the typical Canadian over 65 is more than three times greater than all the money governments allocate per person under 45 for grade 1 to 12, post-secondary, medical care, tax breaks for families, child care, parental leave, Employment Insurance and Workers Compensation.

So are the budgets of our governments striking the right balance between generations? That’s what my grandmother wonders.

Young people’s wages are down around 15 per cent compared to 1976, despite the fact they are more educated than any previous generation. They begin their working lives with lower incomes and higher student debts, often in jobs that don’t use the skills they’ve worked hard to acquire. Then they face housing prices that are 80 per cent higher than in 1976, which means working about 10 years instead of five to save a 20 per cent down payment for an average home. Behold the SQUEEZE between time and money in which many of Gens X, Y and the Millennials find themselves.

For many, this time and money squeeze happens around the same time they’d like to start a family. Problem is, they can’t work their way out of the squeeze without compromising time at home when their kids are young. But if they take this time, many compromise the financial foundation they’ve patched together by devoting more time to the labour market.

My gran expects younger generations to work hard. After all, she lived through the Great Depression and the Second World War and knows the value of personal sacrifice and responsibility. But she also knows that valuing personal responsibility doesn’t stop Canadians from investing $45,000 per retiree. So why should it discourage us from questioning whether $12,000 is the right level of government expenditure per younger person?

We have evidence that raising the amount we invest per younger person by just $1,000 – from 12,000 to $13,000 – could go a long way to ensure that Canadians under 45 can deal with lower wages in the face of higher student and housing debts without compromising the families they have, or the families they may one day want.

By raising such issues, my grandmother joins a growing group of Canadians who are part of the Generation Squeeze campaign (gensqueeze.ca). This budget season, Gen Squeezers want to know if governments will widen or narrow the generational spending gap. Will we create more budgets that prioritize the health and security of our aging population at the expense of the well-being of their kids and grandchildren? Or will we avoid such trade-offs and produce budgets that work for all?

Paul Kershaw is a UBC policy professor, and the founder of the Generation Squeeze Campaign.

—Troy Media

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