Bank of Canada governor Stephen Poloz caused quite a stir when he recently suggested that young Canadians ought to volunteer in order to gain valuable work experience in their field. And while Millennials struggle with the shortage of well-paying entry level jobs, this problem is just the tip of the iceberg.
Once they do find meaningful work and begin paying taxes, they will inherit a crushing debt load. Thanks to reckless spending at Queen's Park, every woman, man and child in this province is on the hook for over $20,000 in outstanding provincial debt. Add to that their portion of federal debt and the number jumps to over $37,000.
This is money our governments have borrowed on our behalf, and we pay dearly for it. Taxpayers fork over tens of billions of dollars in annual interest payments on this debt, meaning our taxes go to bankers and lenders rather than doctors and teachers. Taxpayers will eventually be forced to pay down this debt, through higher taxes and reduced funding for social programs.
The debt burden doesn't end there. We're also on the hook for future promises. The lack of pre-funding in programs like health care, elderly benefits and government sector pensions means that our government will be forced to spend and borrow more down the road to cover the cost of upholding these expensive promises.
The Fraser Institute calculates that the all-inclusive debt burden per taxpayer in Canada is over $243,000.
And the debt problem is about to get worse.
Nine-million baby boomers will retire from the workforce over the next two decades, and when they do, they will start to consume the most expensive forms of government programs. Canadians are retiring early (the typical government worker retires at 59, while the rest of workers retire at age 62) and living longer than ever.
This is great news for seniors, but terrible news for our public finances and for young Canadians forced to foot the bill.
Generation Y has been dubbed the "Millennial" generation because we came of age at the turn of the new millennium.
A more fitting name for this cohort is Generation Screwed.
Young Canadians will be forced to prop up flawed government programs that are unsustainable and have not been pre-funded. Rather than saving for themselves, they will have to contribute more of their money to bail out a sinking ship.
And while young people contribute more, they can expect to receive less.
Like any Ponzi scheme, these government programs require constant growth and new members joining the bottom to pay out those collecting from the top. But Generation Screwed is a smaller cohort than the baby boomers, and will therefore carry a larger personal burden.
The sad reality is that many of the programs we hold near and dear -- government health care, Old Age Security and even the Canada Pension Plan -- will either be significantly scaled back or they will go broke under the weight of their own unsustainable promises. This means that folks in Generation Screwed will be forced to pay out of pocket in their retirement, despite paying into the system throughout their lives.
These programs are an incredibly bad deal for young Canadians.
Thankfully, some have started to take notice and demand more fairness. The Canadian Taxpayers Federation is working with students across the country on a campaign, not coincidentally called Generation Screwed.
We're hopeful these young leaders will fix this problem. They don't have any other choice.
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