Canadian millennials are paying 20% ​​to 40% more in income taxes to support retirement benefits than baby boomers did at the same age, according to new analysis from Statistics Canada’s Social Policy Simulation Database, which compares 35-year-olds in 2022 compared to 1976.

The change comes as Canada’s elderly population has more than doubled by 19 per cent from 8 per cent since 1976, leaving fewer workers to shoulder rising retirement costs.

“A generation, when it becomes old and frail, should not expect to be treated any better by its children than its parents’ generation was treated in their old age,” said Michael Wolfson, former assistant chief statistician of Statistics Canada.

Government spending on health care for the elderly nearly doubled to 9.5% of income in 2022 from 5% in 1976, while payments for old age security rose to 5.9% from 5.4% , the data show.

In Ontario, a worker earning $54,000 now pays $276 more annually in federal and provincial taxes on retirement benefits than his or her counterpart in 1976, adjusted for inflation. High earners face an increase of $4,124.

The burden is set to grow further as Ottawa implements planned increases to Old Age Security and the Canada Health Transfer, while provinces increase medical spending for aging populations.

Where seven working-age Canadians supported every pensioner in the 1970s, that ratio has dropped to three to one, leading to increased individual tax burdens despite lower global tax rates.

Recent political movements have complicated the outlook. The Bloc Quebecois has proposed raising old-age security payments at income levels, while Ottawa has reduced immigration targets without addressing the fiscal implications for the three younger Canadians who support each pensioner.

“If we want to fix this problem, governments need to talk honestly with voters about the trade-offs between three options: changing taxes, cutting benefits for boomers or increasing immigration to support Canada’s working-age population,” Dr. Paul Kershaw, a politics professor at the University of British Columbia and the country’s expert on generational fairness, wrote on Globe and Mail.

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