Taxes, Transfers, and Generations in Canada

📖 The Scoop

Government expenditure cuts and spending restraints in almost all major programs means that federal and provincial governments in Canada now expect balanced budgets and possible surpluses over at least the next several years. This commentary addresses the long-term implications of fiscal policies given the demographic transition expected when the baby boom generation reaches retirement age. One policy considered is using a large portion of any projected federal surplus for higher spending. An alternative policy allows these surpluses to reduce outstanding debt. The commentary examines how these two cases would affect different age groups and which policy, if any, could be sustained well into the future without making further changes but leaving government able to pay its bills. The commentary also presents the historical impact that government taxes have had on different age groups, and discusses some normative issues in reaching a decision on what an equitable distribution of government flows to and from different generations should look like. The main results are derived from a technique known as generational accounting.

Genre: No Category (fancy, right?)