Canada will need an extra $93 billion to fund public services by 2025 because of its rapidly growing aging population, according to a new report.
Released by Accenture, a global management consulting company, the report highlights the need for increasing efficiency in managing the public services sector.
“Ninety-three billion dollars in projected additional costs for Canadian public services by 2025 leaves government leaders—at the federal, provincial and territorial levels—with a difficult new reality,” Claudia Thompson, leader of the Canadian Accenture Health & Public Service business, said in a press release.
The report estimated the total expenditures for public services for Canada along with nine other countries including Australia, U.S., and U.K. by measuring each country’s projected expenses while considering economic and demographic changes.
As Canada’s struggle to accommodate its aging population grows, Accenture suggests a simple solution for generating the necessary funds.
“We believe increasing efficiency in the public-sector must be part of the solution; it gives government leaders an option beyond just the traditional choices of cutting services and raising revenue,” said Thompson.
The report suggests efficiencies such as personalizing services for each user and improving cooperation between all levels of government to eliminate duplication of services.
Although 54 percent of those surveyed said public services they already receive are satisfactory, when asked what they thought should be the top priority for government, 44 percent agreed that public services could use more efficiency and 38 percent said it’s important to plan for the future.
By 2025 there will be 20.6 percent of Canadians over 65, compared to 14.1 percent in 2011.
In a questionnaire about digitalizing more public services, around 70 percent agreed that the government needs to be more proactive. Currently only 42 percent of public services in Canada are managed using digital channels.
The report further estimates that by 2025, the government could save $95 billion annually if public sector efficiency increases by less than one percent.
In total, Canada is projected to spend around $745 billion on public services by 2025.
To calculate the amount needed for funding public services in the future, the report used the latest available data from 2008 which showed how much the government spent per individual.
Provincial and territorial governments spent around $10,742 on those 65 and up, while for those under 65, just $2,097 per individual was spent.
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