Recently a distinguished U.S. economist, Alvin Hansen, stated that we in North America will undergo a period of secular stagnation as our population ages.
Is this a likely prospect for Canada?
It is obvious that all of us as individuals are aging as is our workforce. Few recognize how much our population is getting older. For instance, in 1960 there were 1,358,000 people 65 years of age or older, or 7.6 per cent of our population.
Last year there were 5,379,000 in that age group, or 15.3% of the population – clearly doubled in two generations.
Hansen inferred that this increasing percentage of older people means less investment and hence persistent stagnation, an omen for a decreased economic expansion.
Canada’s population has doubled over the past two generations, a rate that is unlikely to recur in the foreseeable future. Does that portend the slow-down predicted by Hansen?
Still, conditions here seem more propitious, entailing a more hopeful outcome. Of course, optimism would be more muted if our governments and political leaders fail to act with more wisdom than hitherto has been the case.
It must be noted first of all that our workforce is experiencing a remarkable expansion in the number of educated workers, this despite the general aging of our population. With so many young people getting more educated, events not immediately foreseeable are likely to occur.
Thus, there is every reason to anticipate immense opportunities to be generated by this highly educated group.
Our resource sector has the potential for leading to major economic opportunities. The secular drought occurring in the southwestern United States and Australia should prove to be a boon here.
Canada has 20% of the world’s fresh water, something that is in short supply south of the border. Our resource sector should fuel expanded infrastructure spending that will result in economic growth.
Long ago Prime Minister John Diefenbaker’s “vision of the north” was derided, but today it is recognized that it is a resource with enormous potential. The population of the Yukon and the Northwest Territories is about 80,000. This compares with the 30 million in the same latitude in Russia.
Too, the high savings rate of our population, a concomitant of an aging population, will fuel expanded investment.
All of these factors should enable us to continue to make great economic progress. We simply must hope that our political leaders do not squander these opportunities.