any, might reverse this trend. If your living standards are to improve over
your lifetime as much as your grandparents’ did over theirs, Canada’s rate
of productivity growth will need to increase significantly.
Population Aging
The average age of the Canadian population is steadily rising, due both to
a long-term decline in fertility and to an increase in average life-
expectancy. This population aging has two important economic effects.
First, since people eventually retire as they approach their “golden years,”
there will be a decline in the growth rate of Canada’s labour force. As a
result, some firms and industries will find it more difficult to find workers,
and wages will likely rise. Second, since our publicly funded healthcare
system tends to spend much more on seniors than it does on younger
Canadians, there will be a significant increase in public health-care
spending that will put difficult demands on governments’ fiscal positions.
This same demographic problem is being encountered in most developed
countries.
Climate Change
Climate change is a global phenomenon that has important implications
for most nations on Earth. The long-term increase in the emission of
greenhouse gases—caused largely from the burning of fossil fuels such as
oil, coal, and natural gas—has led to an accumulation of these gases in the
atmosphere and is contributing to a long-term increase in Earth’s average