The Governor General's Canadian Leadership Conference

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David Foot
David Foot
Professor, Department of Economics
University of Toronto
David Foot  

Mr. Foot`s summary of his remarks to the Conference:

David Foot, author of the Boom, Bust & Echo books, contends that demographics explains two-thirds of everything economic locally, nationally and globally. He started by using past census data to define the Boom, Bust, Echo and other demographic groups and establish that “every year we get a year older”! He then turned to the recently released 2011 census data to draw some broad conclusions..

Locally, he noted that communities in Eastern Canada are generally older than central and western Canada and that larger cities are generally younger than smaller communities and rural areas. Also, he pointed out that Canada’s aboriginal and Inuit populations are noticeably younger than the national average. Nationally, he noted that the new data confirmed growth in the pre-school age group for the first time in 30 years, especially in Quebec, Saskatchewan and Alberta. This Echo of the Echo (the grandchildren of the Boomers) suggests increased demands for childcare. Meanwhile, the aging of the Echo generation resulted in school closings, first at the elementary level followed by the secondary level in many communities. Declining post-secondary enrolments are next he predicted. The predictable entry of the Echo (or Gen Y) into the workforce over the 2000s meant that there would not be a labour shortage, as frequently claimed by many business leaders, and exacerbated the rise in youth unemployment over the decade.

Foot then noted that the young have always been the champions of new technology. The coming of age of the Echo has propelled innovations in social media and, therefore, as workers they have “issues” with their Boomer and Bust managers. But, he cautioned, their technological advantage will also fade as they age into parenthood and management positions, as it did for the previous generations. Meanwhile, the aging Boomers are beginning to reach the traditional retirement age (1947 + 65 = 2012), but rising life expectancies (two years per decade over the past 60 years) means that the average 65 year old today can expect to live another 20 years. They are healthy and may wish to continue working, but not necessarily full-time. Gradual or phased retirement options that allow them to both contribute and withdraw from pension plans and RRSPs would keep them in the workforce paying taxes, alleviating any future shortages yet also create opportunities for younger workers. He suggested the current retirement and pension designs do not reflect this new workplace reality.

Globally, Foot pointed out that while Canada is the oldest member of NAFTA it is not old from a global perspective. The populations of Germany, Japan and Russia are now declining. They are the powers of the past. Within the next decade Turkey will pass Germany as the largest population in Western Europe. He anticipated higher future wages in China as the one-child policy results in fewer younger workers, thereby slowing economic growth and raising per capita incomes. India will not follow suit because of higher fertility. Besides Turkey, Foot pointed to countries like Brazil and Vietnam as future economic powerhouses as a result of large populations with well-educated young workers and replacement fertility rates. He reflected on the Arab Spring noting that most countries in the Middle East had high fertility as a result of limited female education and, therefore, experienced large youth populations who were often unemployed and restless. Establishing stability will be a challenge. Notable exceptions were Iran and Tunisia.

Finally, Foot noted that population aging almost inevitably results in slower economic growth, lower interest rates, and retirement and health care funding challenges. It also results in more passive recreational pursuits like walking and gardening. In addition, as a result of increasing life expectancies, the average person believes that they are at least a decade younger than their chronological age, thereby creating communication and marketing challenges. He concluded by reminding the audience: “Always remember you’re unique, just like everyone else!”

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