Canada: No country for old men (or women)

The Canadian population is aging, and getting old sucks - for economies, as well as for people.

There is nothing that can stop an individual from aging. Not face cream. Not hot yoga. 

But perhaps, for our economy, there is hope. Immigration could make us young again. New Canadians will kick start our economy, pay for our pensions and health care, and look after us in our dotage. Geriatric boomers can then devote themselves full-time to rest and relaxation.

What seems to have escaped immigration advocates' notice is that Canada is, for the most part, no country for old men (or women). The winters are cold. The summers are hot. Our vast country is mostly made up of rocks and trees and trees and rocks. And water. I love it now - but will I love it when I'm afraid to walk anywhere in winter because I might slip on the ice?

Canada is also expensive. We have some of the costliest health care in the world. The wages for other care workers, from home makers to night nurses, are also relatively high. Care that costs hundreds of thousands of dollars here would cost a fraction of that in India, Cuba, or Costa Rica.

So why import a young worker, and pay her tens of thousands of dollars a year to care for old folks? Why not export older Canadians, set them up in little retirement communities in the sun? 

The basic issue is the ratio of old people to young people. Much policy discussion has focused on increasing the number of young people. This modest proposal would address the number of old people instead.

Comments

[Stephen Gordon]

I wonder how many people can be comfortably housed on the Turks and Caicos Islands.

[K]

Frances,

Are you proposing to modify the dependency ratio, i.e. ship 'em to Turks and Caicos and cut 'em off? Or just find a nicer place for them to live?

Stephen,

(With all due respect to the citizens of Turks and Caicos who may have other ideas...) if we populate it at the 7000/km^2 density of Singapore, then we could fit about 3m people in the 430 km^2. Sounds about right. Golf would be out the question though, except for the super rich.

[Wendy_waters]

This has the potential to help with the housing affordability issue too.

[Frances Woolley]

K - A Swiftian modest proposal would modify the dependency ratio by cutting 'em off. I had something less drastic in mind - reducing the cost of dependency by finding less expensive ways to provide older folks with the care that they need.

Wendy - I sometimes wonder why people are so keen on immigration as opposed to other solutions. If you're the owner of a prime chunk of Vancouver real estate, the last thing you want is for housing to become more affordable!

[Yildo]

Colonialism 3.0: Buy a warm country for Canadians to retire to.

[genauer]

LOL,

for Germans that is Mallorca ("Malle") and the rest of the Spanish Coast.
Problem is, they became too expensive

Question is, how many canadian folks can afford the turks, it is pretty expensive.

[Wendy Waters]

Personally (as a Vancouver home owner), I would probably not benefit directly from the housing affordability implication of this proposal.

However, the benefits to the broader economy should not be overlooked. Think of the lost productivity in the GTA for example of younger people doing 90 minutes (each way) commutes. What if they could buy the same sized home closer to work? Also think of the infrastructure savings if more freeway, metro and other transport capacity did not have to be built right away?

***
If the Turks is expensive, maybe Canada should set up a Charter City for retirees in Nicaragua or Honduras.

[Shangwen]

So, all we need is a slight modification to the Indian Act, just changing the target audience? A reserve in a nice location with cheap healthcare....sounds perfect.

[Frances Woolley]

genauer - the big cost of pop aging is health care. I agree with you about the affordability of the Turks, basically the kind of destinations that are ideal are the medical tourism destinations - Mexico, Cuba, etc. Places with lots of relatively low paid doctors and nurses!

Wendy, the Charter City is a really fascinating proposal. I agree absolutely about the productivity cost of commuting. There's also the environmental cost of living in a harsh climate - think how much a person's environmental footprint could be reduced by moving from Ottawa to a place with far lower heating and cooling costs...

[J.V. Dubois]

I am not that sure about this proposal. I know of cases (genauer could know better) that German government tried to fight exodus of German seniors to cheap locations like Thailand, that is basically sort of import (just as tourism is sort of export). As for the health care, I recall some studies that a large part of the total health care costs is spent during the last year of the life.

So to sum up, the export of seniors is of course very good for them and for the poor countries with good weather that will recieve them. So I am for it. But it will not help the home country for which it is a drain on resources either in a form of import (if pensions are paid out from current taxes) or as lost income from potential sell of services (in case pensions are privately funded)

Plus the risk of health care costs is still there as for me it is very likely that seniors with the most costly long-term conditions will decide to stay home in order to receive better treatment from public health-care systems.

[Wendy Waters]

JVD, you're raining on this plan! But, you're right, it isn't a perfect solution. There is also of course the loss of free childcare which many retirees provide for their grandchildren during their more active and healthy retirement years.

Looking at 2011 Census, maybe Alberta is a good example of a place that has fewer seniors and older boomers compared to national average (I think they move to BC upon retirement), and compared to younger co-hort groups. A case study to watch?

[Joseph]

"far lower heating and cooling costs"

I think that this is tricky. There are a limited number of places in the world with such a wonderful climate that you don't end up with either heating or air conditioning. California comes to mind. But try Florida or Texas in the summer in an un-air conditioned house. Yikes!

As air-conditioning is a lot more energy intensive than heating (in my experience for sure), I wonder if the energy benefits are limited unless we get a destination with an idyllic climate.

[Peter N]

Maybe Goa. Build a teaching hospital and combined faculty medical school, nursing school and medical research facility in Goa. Use it as a cheaper place to train Canadian doctors and nurses as well as source of English speaking immigrant medical personal. You could even do medical tourism.

Some sort of balanced system would have better economics than just exporting old people and importing doctors and nurses.

Seeing as it would be Goa, you might be able to rope the Brazilians in.

[Shangwen]

I'm trying to imagine how this would work, and I see a replay of the current dilemma.

1. Forced relocation is not an option. Only the very young or the nearly dead would vote for it, so I guess personal freedom must be preserved.
2. A private company decides that low-cost mass housing of the elderly is possible in a location with cheap healthcare (Belize? Uruguay?)
3. Inevitably, the only people who would consider such a move are the middle- to upper-middle classes, who have high expectations of healthcare.
4. They move to Belize, but want healthcare at least as good as back home. Every 4 years they fly home to vote (cheap charter).
5. The gummint decides Canada has to subsidize Belizian healthcare so that it satisifies the demands of the elderly, as long as the subsidy is lower than the cost of those elderly consuming HC back home. Domestic HC contracts slightly.
6. Back in the new, exciting Young Canada, the poor elderly swamp the healthcare system.

Maybe the solution is not to export the elderly, but to encourage immigration by the super-productive elderly, like this guy.

[Determinant]

So why import a young worker, and pay her tens of thousands of dollars a year to care for old folks? Why not export older Canadians, set them up in little retirement communities in the sun?

The basic issue is the ratio of old people to young people. Much policy discussion has focused on increasing the number of young people. This modest proposal would address the number of old people instead.

No, this is a secondary issue. The primary issue is that we have a depressed economy (see Jeffrey Simpson's op-ed yesterday) and can't even employ the people we have, let alone newcomers. Further, our Immigration system has been broken for a long, long time. The Federal government tries to attract professionals (engineers, doctors, etc.) and then those professionals are refused licensure by provincial regulators, often their experience is disqualified, and/or Canadian employers won't recognize their experience. Then we get underemployment and PhD Engineers driving taxis. This is waste, a tragedy and the immigrant deservedly has grounds to complain. They were practiced upon and it is wrong.

I first learned about this in university, it was a silent scandal. A massive immigration scheme is premised on full employment, which we don't have, and easy ability to economically integrate, which we also don't have. The full employment years of the 1960's and 1970's are gone.

[whitfit]

"The Federal government tries to attract professionals (engineers, doctors, etc.) and then those professionals are refused licensure by provincial regulators, often their experience is disqualified, and/or Canadian employers won't recognize their experience. Then we get underemployment and PhD Engineers driving taxis. This is waste, a tragedy and the immigrant deservedly has grounds to complain. They were practiced upon and it is wrong."

I disagree. The degree acts as a signalling device. This person is intelligent and has a low discount rate. They might drive taxis to start, but may start businesses, will send their kids to University and will have an upwardly mobile family. I can't judge whether the non-recognition of their credentials is legitimate or not - I do know that my wife, a doctor, has worked with international medical graduates and helped with the examinations. She reports that some of them have difficulty communicating, have much less in the way of clinical training (some systems do fine with the textbook learning, but have poor clinical mentorship and practice skills development, which is emphasized in the Canadian system).

The Canadian immigration system takes these people not to necessarily directly use their skills/training, but because those things act as a signal to how they will act long term in the Canadian economy. It seems to me that such an analysis would be an obvious economic argument.

[genauer]

LOL,
I am actually starting to worry about repeated comments like “genauer could know better” I am NOT here to teach, but to learn and then sometimes contribute to the discussion, if I feel I have something worthwhile to say.
Over the years I actually wondered a lot for myself, where and how I would like to retire, and the beliefs about where I get affordable, good and reliable healthcare are actually more important than tax rates.
And Canada is, as usual, a close 2nd to my home Germany : - ) 3rd Austria, as usual.

I see many cases how elder care plays out, I am not really happy with my own role, and all that is folded to a large degree into the overarching topic of future settlement structures.

@Joseph
the air condition problem can be taken care of by photovoltaics, I think, at a reasonable price.

I am sceptic of these artificial settlement structures like completely new large cities, like Brasilia, or similar attempts in mainland China now.
But this “Charter City” should be tried out, and Canada is clearly the best possible sponsor for that, without all our European baggage.
Honduras has also the advantage that local worker are cheap and speak English, something very important, when you are in your last year of life, and want to believe that you can make yourself heard.
I actually have personal discussions with people, who think relocation to Malaysia or Thailand are the way to go, and as usual: why should the German government try to fight this ??
-and with people who relocated their software business to their Thai customers.

In semiconductors and venture capital, it is the same, only 1 or 2 out of 10 ideas play out.
You have to try things like charter cities or millenium cities.
But “forced relocation”. Huugh

P.S. I am in the moment actually playing personally with my “settlement structure”

[Frances Woolley]

Shangwen: "3. Inevitably, the only people who would consider such a move are the middle- to upper-middle classes, who have high expectations of healthcare."

I disagree. The upper-middle class can afford BC real-estate. It's the ordinary Canadian who can expect to see a big change in their life-style - who can go from just getting by to being comfortably middle class - by moving away.

"4. They move to Belize, but want healthcare at least as good as back home."

As we've talked about before, the issue is long-term care, and that doesn't require a huge amount of expensive equipment, the big cost is labour. And that can be provided far more cheaply elsewhere.

[K]

Shangwen: "the only people who would consider such a move are the middle- to upper-middle classes"

Depends. What if we throw in a higher OAS in return for foregoing Canadian health care. It's not guaranteed by the constitution, after all. I don't think most Canadians would object if we revoked universal health care for over-pensioned snow birds. We could still provide the same set of services, but using Mexican, instead of Canadian medical staff. Whatever.

As to climate, the higher altitudes of Mexico are lovely. Year round.

[Determinant]

Which is eminently insurable, Long-Term Care policies exist in the market. The key is to pair them with Disability Income policies, which protect against loss of income while working and are seen on most Canadian pay stubs. The combination works very well and it's stable as a contract. Why resort to public-sector options before exhausting the private sector?

Frances, you social-democrat you! ;)

[Frances Woolley]

Shangwen: "Forced relocation is not an option."

It wouldn't have to be forced. Like I said, it gets cold. And hot. I love living in Ottawa, but it can't be denied that lots of people look to move away from here when they retire - or before. Ditto Alberta.

[CBBB]

I don't know....I really associate Canada as a country of old foggies. All the cities (except maybe Montreal) in Canada seemed very much geared towards older people and families not young people at all.

[Patrick]

Goa sounds good. Or Maybe we could cut some kind of deal with the Turks and Caicos.

More seriously, I think a big part of the problem in Canada is lousy urban design amplifying the cold winters rather than mitigating its effects. Winter in Edmonton devolves into a series of sprints from your car, across wind blasted parking lots, into uninviting big box stores, strip malls, or brutalist monstrosities designed to crush your soul and fill you with despair. Most roads lack sidewalks, and those that do have them (mostly in older neighbourhoods) are not cleared properly because it falls to the property owner to do it. Getting around on foot or by public transit becomes impossible without snowshoes and/or crampons. Most new exurb developments don't even bother with sidewalks, never mind street trees to provide shelter from the wind. It's insane. The build environment is *crap*, and it really makes life a lot worse than it needs to be, and for people without a car it makes it impossible. It's no wonder people flee as soon as they can.

[Frances Woolley]

Patrick - ouch! I imagine Edmonton is windier than Ottawa, and we have sidewalk clearance here (and the tax bills that go with it) but what you say about wind and trees (or lack thereof) is true here.

CBBB - given that Canada is actually one of the younger countries in the OECD that hurts. Though, as was once said of Canadian Prime Minster Joe Clark: "no shirt is too young to be stuffed."

[Determinant]

The North American infatuation with the automobile was truly regrettable. I much prefer bike paths and downtowns. When I used to bike to work, I got better parking than the site manager, the bike rack was right outside the door where my desk was. Plus I felt better when I came into work.

[Shangwen]

Back to the middle of the distribution, there are less extreme options than colonization, charter cities, etc. The looming nightmare is the total cost of long-term care (as in the cost of the care itself, the opportunity cost of pulling so many capable people into a single, relatively unproductive sector, etc.). Oregon has just started a very good experiment meant to reduce the burden:

http://www.npr.org/blogs/health/2012/05/30/153982708/oregons-medicaid-experiment-represents-a-defining-moment

Home care programs do a pretty good job too of deferring admission to LTC. Apparently there are lots of good ideas to try out before we have to build a Waterworld raft.

[Scott P Bacon]

For anyone who hasn't already seen it, the documentary Demographic Winter ( http://www.youtube.com/watch?v=jxUD8E-qbyI ) raises issues similar to the one in this blog post. This post aroused a few ideas I hadn't previously thought of though, thank you!

Specifically, "So why import a young worker, and pay her tens of thousands of dollars a year to care for old folks? Why not export older Canadians, set them up in little retirement communities in the sun?"

I wonder if someone with more knowledge on the subject could enlighten me as to the consequences of exporting all (or the majority) of the wealth the aging baby boomers have accumulated whilst growing and developing themselves here for fifty-odd years...

My question, I suppose, put more clearly is: would the efficiencies gained by exporting many of the baby boomers who are expected to put large strains on our economy (notably through healthcare) outweigh the spending and other investments these relatively rich individuals make domestically?

[Frances Woolley]

Scott - "exporting all (or the majority) of the wealth"

What's the fundamental difference between exporting the wealth, and importing people who will compete with native-born Canadians for a share of that wealth? The only difference, it seems to me, is the weather (not that I object to Ottawa weather, but if there comes a time when I can't skate or ski any more, winter will start to drag).

[Patrick]

Scott, how do you propose the gov't get its hands on the oldsters wealth? Taxes? Forget about it. Old people tend not to spend their savings. They also vote in large numbers, and for now they outnumber the young people. We can't tax them; they can and will vote it down. We can't cut their services for the same reason. On top of not wanting to pay full price for the gold plated gov't services they demand, the boomers seems to also want super jets and prisons stuffed with people housed on the public dime. Somebody's got to pay for it, and it looks like it's going to be the late-20 and 30-somethings and our kids.

What Canada desperately needs is babies (well, we needed them about 15 years ago, but better late than never). Lots of babies. Personally, I don't care if they are immigrant babies, babies of immigrants, or babies born of people already in Canada. Wherever they come from, we need them. The boomers can keep the truck. Murmel Murmel Murmel. (Yes, that's a Robert Munsch reference).

[Scott P Bacon]

@ Frances -

The fundamental difference, at least in my experience, is that exporting the wealthy (say by creating a Caribbean Colony) discourages investment within families, domestic (Canadian) communities, local charities and the like. Investments such as: helping one's children secure their first mortgage, refurnishing/refurbishing an existing property within the family, volunteering at any number of local charities, investing in a grandchild's education by providing housing, income or other complementary items. (I leave the reader to imagine a host of other possibilities.)

Shipping out the wealthy, in the hopes of attracting new immigrants may be alright for Canada (as I think you are suggesting above), but it may not be promising for Canadians already 'in the system' so to speak. I think many individuals may lose their competitive advantage without the wealthy supporting them; especially recent, present, and near future post-secondary students. Not to mention the new voting blocks that would form around immigrants and their communities… creating problems, I think, similar to those Patrick points out above.

@ Patrick

Your question seems to imply that the Government should acquire more of the oldster's wealth, a position I am not fully comfortable supporting. I do however agree with your point on the need for babymaking… for me, big families seem like excellent economic building blocks.

But for the sake of discussion, in reply, I am not sure how I could encourage those with fugal spending habits to change, especially if this attitude has been their tendency over their lifetime… But there is a thought looming about in my mind, one I feel awful pointing out, but here I go: is it such a terrible state of affairs that oldsters do not spend as much as others do? Given that death is a certainty, doesn’t oldster frugality mean larger payouts, bequests, life-insurance claims and the like for others when they do kick the bucket?

While I understand that boomers (and those before them) will likely live longer than any generation before, they should also bequeath the most amount of wealth, shouldn’t they? If so, wouldn’t Canada receive some kind of infusion of capital, or would this only lead to some kind of inflationary period, or some different state of affairs?

Sorry for the line of questioning, it just sort of flowed...

[Frances Woolley]

Scott: "Shipping out the wealthy"

Just to be clear: the wealthy can afford to buy condos in Victoria and enjoy some of the best weather that Canada has to offer. For the wealthy, moving to a retirement community in, say, Cuba would be a decidedly mixed blessing.

The wealthy also, to some extent, lose their social status by emigrating.

It's the not-so-wealthy who stand to enjoy a big increase in their standard of living by moving away - being able to afford a housekeeper, for example, and gaining social status. ("Where are you from?" "Canada" as opposed to "Where are you from?" "[insert name of undesirable neighbourhood here]")

[CaliPlus]

I love living in Ottawa, but it can't be denied that lots of people look to move away from here when they retire - or before. Ditto Alberta.

[eJean1981]

With global climate change ramping up, and the increases in extreme weather events, pretty soon there will not be any places people will want to retire to. The warm spots will all be deserts.