Is Canada Disappearing?

In March, Statistics Canada released a report on Canada’s population that provided a very sobering picture. Well, it would be sobering, if Canadians woke up to the reality that we are not having enough children and that in doing so, we risk radically changing this nation.

StatsCan did find that between 2001 and 2006, Canada was the fastest growing G8 nation, adding 1.6 million people during that time to bring the total population to 31,612,897. The 5.4 per cent growth rate over five years was fuelled mostly by immigration. Canada’s below-replacement fertility rate of 1.48 would result in a net decline in population if it were not for the combination of high levels of immigration and people living longer lives. Furthermore, StatsCan estimates that by 2030, all of Canada’s population growth will be a result of immigration, as the number of deaths is expected to exceed the number of births. Says Hubert Denis, a StatsCan population analyst: “Immigration will be the only factor of demographic growth.”

In recent decades, Canada’s fertility rate (the average number of child births per woman) has fallen and the number of elderly has increased. Canada’s fertility rates are more in line with the dying cultures of Europe and East Asia than with our neighbour to the south. Canada’s fertility rate (1.48) is well-below the U.S. rate of 2.11. Replacement rate – the rate at which a population holds steady before immigration is accounted for – is 2.1. The U.S. is the only industrialized Western nation with a significant population to have a fertility rate near the replacement level.

A 2005 StatsCan report estimated that over the next decade or so, the Canadian fertility rate will fall between 1.3 and 1.7. In France, the fertility rate is 1.9. In Austria, it’s 1.7. Germany, Italy and Spain all have fertility rates of 1.2-1.3 and Japan and South Korea’s are 1.2 and 1.1 respectively. Japan began experiencing depopulation in 2006 and Russia has seen its population decline in recent years. European nations are importing massive numbers of (largely unwanted) immigrants to maintain a tax base for their generous welfare states, while at the same time making small reforms to save costs in the near term. Few economists believe that immigration alone will be enough to prevent a total collapse of Europe’s pension and healthcare systems.

In Canada, there has been little discussion about population trends, but it is obvious that something needs to be done. A few scholars and more than a few politicians like the idea of further increasing immigration to provide the labour Canada will need as baby boomers begin retiring. The cohort that was born between 1947 and 1966 makes up 31 per cent of Canada’s population and healthcare economists and actuaries worry about the effect of such large numbers of seniors on the public healthcare system and Canada’s public pension plans.

But immigration does not seem to be a long-term solution. As Statistics Canada found in 2003, recent waves of immigrants are poorer and remain in low-income levels longer than previous generations of immigrants. The economic benefits of immigration seem to be declining and may not offer a stable and productive supply of labour or a sufficient tax base over time. A C.D. Howe Institute backgrounder released last year, “No Elixir of Youth: Immigration Cannot Keep Canada Young,” said that immigration is not the answer to the issues related to Canada’s demographic shift. Yvan Guillemette and William Robson, authors of the paper, said that increasing immigration numbers from about 250,000 a year now to 320,000 immigrants annually would only “mitigate the imminent slowing down and reversal in labour-force growth,” because new immigrants will have to be of working age and not young enough to alter Canada’s age composition. They also raised concerns about the ability to absorb the larger number of immigrants.

Rather than tinkering with immigration rates, Guillemette and Robson suggest increasing the retirement age and scaling back public pensions.

What is notable is that the C.D. Howe Institute paper did not explore ways to increase fertility rates. Ultimately, the problem is not immigration or aging or the cost of its social programs. The problem is that Canadians are not having enough children.

In its 2005 report, StatsCan found that much of the decrease in fertility rates was the result of women 24-29, as well as those who were university-educated or had high-paying jobs, eschewing having babies. The reasons for that are complex and multifold. Feminism, the breakdown of family life and increased secularism are all factors, but on top of the list must be abortion and contraception. With the easy availability of birth control and more than three million abortions since 1969, it is not difficult to see why Canada’s fertility rate is falling and failing to reproduce sufficient numbers to, at the very least, maintain the population.

It is estimated that by 2015, there will be more people over 65 than there will be children under 15. Within 15 years, the number of deaths may exceed the number of births. At that point, without immigration, Canada will begin to depopulate.

How to reverse the course? As we note on page 2 of this paper, the Conservative government is re-prioritizing families in the budget to make life a little easier for those with children. But do couples really complete a cost-benefit analysis to determine whether or not they can afford kids? Perhaps not with a pen and paper or on a spreadsheet on the computer. It is unlikely a couple will decide to have a second child just because the government is handing out $100 a month to families with kids under six. Fidgeting with the tax code is not enough.

Many countries are looking at ways to increase childbirths. France offers benefits for families that have a second child and even more generous benefits for families that have a third. Russia will pay women approximately $9,000 to have a child. Many European countries are extending parental leave and Singapore is paying for fertility treatments.

In his book America Alone: The End of the World as We Know It, author and columnist Mark Steyn suggests some creative, but practical, ways in which Canada and Europe can arrest the fertility rate decline. He says it is time to “embrace serious uber-natalism” and proposes massive structural changes in the tax system and society. Steyn says taxable income should be divided by the number of people in the house. If an unmarried man with no children makes $50,000, he should be taxed on all $50,000. If, however, a married man with four dependents (a stay-at-home wife and three children) makes $50,000, his income should be divided by five; only $10,000 of his income would be taxable. That, says Steyn, “makes a family affordable.”

Another thing that makes families “unaffordable” are high housing prices. Steyn notes that “acre for acre, America is the cheapest developed country in which to buy a big home with plenty of space for plenty of kids.” Steyn says one of the reasons Canada’s fertility rate is so European is that Canada’s population is more concentrated due to geography and other factors, forcing more home-buyers to compete for smaller parcels of land. Steyn’s point is borne out in the March StatsCan report, which found increasing urbanization: 80 per cent of Canadians live in cities. Most of that growth is in Vancouver, Toronto and Montreal (immigration) and Calgary (interprovincial migration). A few years ago, when my wife and I were looking to move our family from downtown Toronto to the north end of town, we were taken to a new three-bedroom ‘starter’ home. The price tag: $695,000. No wonder urbanites have small families; many are forced to limit family size to one or two or consider moving to a new city.

Steyn also finds “deferred adulthood” to be a culprit in falling fertility rates. “We enter adolescence much earlier and leave it much later,” he says. One corrective would be to “redirect the system to telescope education into a much shorter period.” A more vigorous public education system could redirect people from post-secondary educations, thus encouraging people to begin work and start families earlier in life. As couples wait to have children, they decide they should not or find out they cannot have two or three children.

As Steyn’s proposals suggest, tackling falling fertility will require bold and creative public policy. The damage done by nearly 50 years of anti-life and anti-family ideology cannot be corrected with mere economic incentives. It will probably also require a psychological shift and religious re-awakening.

With or without immigration, the Canada we know is disappearing. Without a growing population to support the aging population, Canada faces a choice: curtailing the pensions and healthcare many Canadians have come to expect or punatively high tax rates (which might encourage workers to leave the country). None of this is sustainable, especially the selfish mindset infecting the baby boomer generation and the (few) children they did in fact have, which led them away from having children to more material pursuits. The Canada we knew is disappearing. Is there a rabbit in the public policy and ideology hats that can make it reappear? As Steyn says in his book, the issue is ultimately about the will to do what is necessary.