Saskatchewan budget doesn’t work for all generations

When the government can find new money for asphalt and bricks but not young people it’s time for a change

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Generation Squeeze
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VANCOUVER, BC, Mar 19, 2015/ Troy Media/ – Build roads and protect medical care for grandma. But don’t build child care for her kids and grandchildren. These are the kind of trade-offs that the Saskatchewan government made (again!) in its 2015-16 budget.

Coming into this fiscal year, the Saskatchewan government already contributed to a combination of federal, provincial and municipal spending that totals more than $33,000 per person age 65+ compared to less than $12,000 per person under age 45. Premier Brad Wall’s government will reproduce its contribution to this age gap in 2015/16 according to the budget that will take him into the next provincial election.

Saskatchewan budget’s misguided priorities

Most of Saskatchewan’s spending is distributed through medical care, education and social services. When we break down this spending by age, the Saskatchewan government budgets over $15,000 per person age 65+, compared to $8,000 per person under age 45. Medical care – the biggest slice of the provincial budget at $5.5 billion – drives this age pattern. Forty-two per cent of these funds go to the 14.5 per cent of the population age 65 and older.

Medical care is important. My mom is 70. My grandmother is 99. They depend on medical care. But they don’t want to pay for it by not paying for policy adaptations that their kids and grandchildren need.

Adaptation is necessary because the typical 25 to 34 year old working full-time in Saskatchewan earns around $2,000 less per year than did the same age person between 1976 and 1980. Young people earn less today even though they are more than twice as likely to have a postsecondary education, and must pay far more for housing. The average home in Saskatchewan in 2014 cost $298,360, up from $154,858 in 1976. This big hike in home prices has increased the wealth of the typical person over age 50.

Earning less while paying more is why far more young people get a postsecondary education and far more families rely on two earners compared to a generation ago. Yet Saskatchewan is slow to adapt to these changes. While protecting medical care spending for the aging population, governments have let tuition more than double from what it was in 1976, and child care now costs as much as university.

saskatchewan budget
Finance Minister Ken Krawetz got it wrong in the latest Saskatchewan budget

Finance Minister Ken Krawetz, in the Saskatchewan budget, chose not to address these challenges again this year because his government had other priorities, boasting a surplus of $107 million, along with new spending on . . . capital projects.

After adjusting for inflation, there will be next-to-no change in total social expenditure for medical care, education and social services. Given the province’s demographic changes, this means all age groups can expect a 1 to 2 per cent decrease in per capita spending.

While social spending is down per capita, the government did take on another $1.5 billion in debt to pay for new infrastructure, especially transportation. Debt is projected to grow for the next four years.

When governments find new money for asphalt and bricks but not young people, it’s time for Canadians in their 40s and younger to revisit how we organize in the world of politics. This is especially true when the same budget spends half on younger citizens of what it spends on retirees, and leaves larger government and environmental debts to be repaid in the future.

Generation Squeeze needs to organize

We are unlikely to get budgets that work for all generations until younger Canadians take note of the important work of the Canadian Association of Retired Persons (CARP). It’s been lobbying for decades on behalf of Canadians age 50+. CARP gives ample reason for those of us in our 40s and younger to learn from the wisdom of our elders by building our own national lobby. That is what Generation Squeeze is doing from coast to coast.

Our goal is to safeguard the old age security and medical care for our aging population, while ensuring that governments adapt policy with the same urgency for younger generations. Happily, this hopeful vision is galvanizing the energy of young and old alike in support of a Canada where all have the chance to pay off the average student debt, save for a home, afford a family, plan for retirement, and do all this while leaving at least as much as we inherited.

Dr. Paul Kershaw is the founder of Generation Squeeze, and a policy professor in the UBC School of Population and Public Health.

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