Tuesday, January 12, 2010

Here comes the BOOM!

Today we're going to take another look at demographics, and more specifically the pending wave of baby boomers into retirement. We touched on this last month, but just in regards to Alberta. Today we'll do all the provinces and territories and see how they all stack up heading into the unknown.

Demographics - Atlantic Provinces
The dotted line is the national average... so ones position relative to that line tells us how much better or worse off they are then the average province. We'll start out east with the Atlantic provinces.

We can see they all chart fairly similar patterns. Typically below average levels of twenty somethings (likely having moved elsewhere looking for work), and conversely above average levels of fifty-somethings. This would suggest they're probably going to get hit harder than most when the boomers start retiring en masse.

Demographics - Ontario, Quebec and the Territories
Now we'll look at Ontario, Quebec and the various territories. I probably should have broke these up as the territories figures are more or less their own animal(s), but alas I wanted to cram them all into three graphs.

Ontario is the red line, and Quebec the blue, we'll start with those two. Being by far the largest province it's no surprise Ontario plots a line very close to the national average... and when it comes to boomers they'll actually fare slightly better than average. Quebec also charts close to the national average, but a little above average once you get past 45 year olds, so they'll feel the effects a little worse than Ontario.

Like I mentioned the three territories are their own animals. The Yukon appears to have the pattern most similar to the rest of the country, but has a very big spike of boomers. Relatively speaking both the NWT and Nunavut have very young populations, and see a very big drop off once they hit 50 and 40 respectively.

Demographics - Western Provinces
Finally we'll look at the western provinces. We see a few interesting trends here. As we discussed last month, Alberta has seen a big influx of twenty-somethings during the economic boom, thus we can see a noticeably higher proportion of twenty- and thirty-somethings... which also causes a downward shift in the proportion of older people. But as we discussed in a follow up, those that moved here can be a fickle bunch, and can leave as quickly as they came.

Saskatchewan is another interesting case, where their levels of 30-50 year olds are noticeably low. One would suspect this is likely a result of the flip-side of the effect Alberta experienced, that being Saskatchewan having relative economic difficulties for much of the prior two decades and thus a fair number of their young people left and didn't return. Of course Saskatchewan's economic situation has took a real turn for the better in the last couple years, so it'll be interesting to see how they chart in the future.

Now British Columbia, which while it has a reputation for attracting retirees, they seem to track remarkably like the national average. Of the Western provinces they appear like they'll be hit hardest by the boomer exodus from the work force, but only slightly worse than the national average. And finally Manitoba, who don't seem to go right up the middle of their Western cousins on the demographic front.

Demographics - Median Age
And this is a graph of the median age of the respective provinces. Whether it adds anything to this article I don't know, but I prepared it, so here it is. We note the larger the wave of baby boomers present in the earlier graph, the higher the median age is. The Atlantic provinces are the oldest, followed by Quebec and B.C. whom we noted were both above the national average line when it came to boomers.

Then you Ontario and the western provinces below the national median age by varying degrees, Alberta coming in the lowest. Yukon is mixed in with the western provinces, but NWT, and Nunavut in particular, are drastically lower. Alberta has again been affected by the resent influx of young people looking for work, so if they start leaving we'll soon find ourselves back in the range Saskatchewan and Manitoba are in currently (and Saskatchewan may actually shift lower depending on how their economy weathers the financial storm).

In any case, it will be interesting to see how the exodus of baby boomers plays out. The governments have enjoyed a steadily increasing population base of working age people for over fifty years... and that's not just going to start to slow, but eventually it's going to begin to shrink (in about 10 years). That these are also generally the biggest earners, and thus biggest tax payers, only adds to the discrepancy.

We're going to see a significant reduction in tax revenue at the very same time demand for services will be increasing in a big way. Thus we're on the cusp of a new paradigm, and one that is very different than what we've become accustom too.