In a recent article, there was an analysis of how changes over time in the number of individuals in various age cohorts in the U.S. play crucial roles in driving some type-of-structure construction activity levels. At the end of the article, a promise was made to do the same for Canada. This current Economy at a Glance will fulfill that commitment.
To tell the story, an equivalent eight graphs have been developed for Canada as were employed to explain the U.S. demography-driven construction market. One major difference is that the historical U.S. data goes back to 1950. Statistics Canada's numbers (i.e., its 'actuals'), available in Cansim Table 051-0001, begin in 1971. Still, that's a considerable period of historical information to be able to call on — 45 years from 1971 to 2015 inclusive.
The projections for 2016 through 2050 are derived from Cansim Table 052-0005. As was the case for the U.S. statistics, mid-range assumptions are adopted for fertility rates, births, deaths and net immigration.
Also similar to America, the progression of certain age cohorts through time is heavily influenced by the Post-World War II baby boom generation (born from the mid-1940s through the mid-1960s), followed by the 'echo' boom (e.g., the children of the baby boomers).
Graph 1 shows the number of Canadian residents each year aged between 4 and 17. This is the age cohort in attendance at primary and secondary schools, from kindergarten through grade 12.
The bump in the curve that peaked in the late 1990s resulted from the echo boom. Over the past 15 years, there has been a gradual decline in the population of this age cohort. Beginning virtually immediately, though, the slope is set for a long period of incline, according to Statistics Canada. All other factors also being positive (e.g., the availability of financing), that suggests good news for firms engaged in building education facilities for younger pupils.
Graph 2 tells quite a different story for universities and colleges. The fallow period for the 4-to-17-year-old age cohort of Graph 1, from 2003 through 2013, moves into the 2015 to 2025 period in Graph 2. This means the number of individuals inclined to sign up for university and college enrollment is about to taper off. The Canadian 18-to-26-year-old contingent won't come back in force until the latter half of the 2020s.
Graph 3 highlights that there remains some spark in the first-time home-buying cohort (i.e., those aged 27 to 40) in Canada. The first ascent of the slope in Graph 3 was caused by original baby boomers reaching their young adult stage. The second ascent, which is about halfway complete, results from the natural growing-up of echo boomers. The bottom line is that there will still be some impetus provided for new home construction by potential first-time buyers out to the early 2020s.
Graph 4 presents a less optimistic outlook for move-up accommodation demand. Its related age cohort — those aged 35 to 55 — has been flat for about a decade, with almost another ten years lying ahead before there will be another mild pick-up in the number again.
Part 1 of this Economy at a Glance looked at the number of individuals in various age cohorts in Canada over time and the resulting influences on the construction of educational facilities and new homes.
Part 2 will move the age of the cohorts higher, revealing implications for the building of assisted living quarters and medical facilities.
The historical data back to 1971 comes from Statistics Canada's Cansim Table 051-0001. The projections, 2015 through 2060, are to be found in Cansim Table 052-0005.
Mid-range assumptions have been made by Statistics Canada concerning fertility rates, births, deaths and net immigration.
Net immigration, by the way, has been accounting for the major difference in the overall faster population growth rate for Canada than for the U.S. Relative to total population, legal immigration in Canada has been occurring at a rate three times or more quicker than south of the border, over the past decade or so.
Immigration has also played a major role in explaining significant variations in the population growth rates of the various provinces in Canada. Until quite recently, new foreign arrivals have chosen to locate in resource-rich provinces where jobs have been most plentiful. There will be more said on this subject, and some imminent changes that are underway, at the end of this article.
Graph 5 clearly demonstrates the aging of the Canadian population. Furthermore, while the 80-year-and-older age cohort has gradually been gaining steam over past decades, it is about to launch into orbit from the 2020s on.
This will certainly mean the need for additional nursing-care homes and seniors' residences in the years ahead; although there will still be a few years during which the increase will proceed at an almost relaxed pace, before it turns into a frenzy.
Graph 6 showcases a fascinating development. Just last year, the number of elderly-aged people in Canada (i.e., 65-birthdays-plus) caught up with and began to surpass the youth element (those aged 14 and under).
Body counts for both groups will continue to grow out to 2060, but older individuals will be more than 50% more numerous by the end of the period.
Graph 7 takes the analysis a step further. On account of coming increases in the numbers of both the old and the young, the dependency ratio — defined as those aged 0-to-14 plus those aged 65-and-older expressed as a proportion of the 15-to-64-year-old working-age population – will climb. By 2060, the Canadian dependency ratio will rise to nearly 70% from under 50% at present.
That's a large jump. It explains why some politicians have become fixated on what they perceive as the need for austerity. They're worried about how to pay for future pension and medical costs.
I would speculate, however, based on the earliest numbers appearing in Graph 7, that there were years straddling the 1950s and 1960s — i.e., during the most prolific period for baby-boom births — when the dependency ratio was every bit as high.
Graph 8 is a backwards-facing ski jump. The number of people aged 100 and over in Canada will soar to about 60,000 by 2060, from less than 10,000 now. And that's without any alliance being made for medical breakthroughs that will prolong lifespans.
Finally, I'd like to briefly outline population growth rates for the nation as a whole and the provinces and regions.
Over the past ten years, Canada's annual average population change has been +1.1%.
That rate of increase has been almost matched by Ontario and B.C., both +1.0%. Quebec and Manitoba have turned in slightly slower performances, both +0.9%. The Atlantic Region has shown little population gain (+0.1% annually); but Saskatchewan, with a treasure chest of natural resources, has surged (+1.3%).
The leader by far among the provinces, though, has been energy-abundant Alberta, +2.4% on average over the past decade. Both immigration and interprovincial migration have played pivotal roles in such an impressive level of advance.
Too bad it won't be maintained now that the global price of oil has become so depressed.