Report: Aging population increasing public service cost

by | Nov 13, 2012 | News

By Alex Lambert

A study has found that due to Canada’s aging population, all levels of government will collectively have to spend an extra $93-billion between now and 2025 to continue funding public services.

The study, released by Accenture and Oxford Economics, looked at spending on public services by the governments of Brazil, Australia, Canada, Germany, France, Italy, India, Singapore, the United States and the United Kingdom.

It reports that in 2011, 14.1 per cent of Canada’s population was 65 or older, and by 2025, that number is projected to swell to 20.6 per cent.

Source: Accenture/Oxford Economics INFOGRAPHIC BY ALEX LAMBERT

It also found that across all levels of government in Canada, it will cost a total of $745-billion to pay for public services between now and 2025.

Claudia Thompson, head of Accenture’s health and public service business in Canada, told Humber News the main motivation for releasing this study was to encourage governments to think more about these demographic changes and how they’ll deal with them.

“What we’re advocating in the report is for governments and the leaders in government to recognize how the population and the demographics are changing and the reality of those changes that will occur and to take action now while there’s time to respond to the future demands,” Thompson said.

“Rather than waiting until the future is here, it’s anticipating the demand on future services and taking action now in response of that demand.”

The report also makes a number of recommendations for improving public sector productivity, such as moving away from standardized services to services tailored for the needs of each citizen, making more use of information and technology, and making it a priority to eliminate duplication and improve the efficiency of all aspects of government.

These recommendations are about providing “even better services with better outcomes to meet the changing demographics,” Thompson said.

She added that there’s “an opportunity to do that by improving productivity and improving the efficiency of the delivery of those services.”

The report, which surveyed 5,000 people in the above 10 countries, found that 54 per cent of Canadian respondents said they’re satisfied with the public services they’re provided, compared to the global average of 36 per cent.

It also found that Canadians’ confidence in the government’s ability to continue delivering public services that meet their expectations and needs over the next five years is split down the middle, with 49 per cent confident and 47 per cent not.

Thompson said that governments who follow the recommendations above will be better able to prevent aging populations from burdening younger generations.

“What we’re trying to do is actually support an approach that does not put extra pressure on the current generation,” she said.

“We’re advocating for actions now that can avoid negative implications.”