A Population Aging Analysis for Canada Using the National Transfer Accounts Approach

This paper develops a new data set using a new accounting methodology called National Transfer Accounts (NTA). NTA permit to build an accounting system that takes consideration the factor age into national accounts. NTA are consistent with national accounts and allows the estimation of lifecycle patterns for income and consumption from private and public sources. It also allows the calculation of lifecycle deficit or surplus of an economy. In this paper we calculate the lifecycle deficit from 2004 to 2007. Moreover, using demographic projections for the next five decades, we conduct projections for lifecycle deficits for the period between 2007 and 2056. The projection results shows that labour income will need to increase rapidly or consumption needs to be cut significantly to compensate for the pressure on the lifecycle deficit coming from population aging.