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Government finances and generational equity
Abstract
"Generational equity" is a topic that has gradually risen higher and higher
on the agenda of governments at all levels. In fact, it is a matter not just
for government policy, but a topic that touches many Canadians directly: young
and old, parents and grandparents. Canadian policy makers increasingly have
to deal with issues associated with the relative status of individuals between
successive generations. The reform of public pension programs presents the most
obvious example, but there are many other developments that raise the same type
of issue. Indeed, the heightened concern over government fiscal policies is
due in large part to the readiness of many to view government deficits and debt
as a burden on future generations. Generational equity, however, is also a concern
of individual Canadians and their families. The allocation of resources between
the young and the old within the family is becoming an increasingly important
issue for many, especially in light not only of an aging population but also
the belief that those just entering the labour force will likely not attain
the standard of living to which their parents have become accustomed.
The contributors to this book examine the operation of government taxes and
expenditures from a generational perspective. In part the motivation for bringing
these essays together is to offer comprehensive and up-to-date information on
the age incidence of government finances. This motivation, however, also has
to do with the development of a new accounting framework, Generational Accounting,
that has gained some currency in many industrialized countries, particularly
in the United States. It is a truism to say that good analysis requires good
data, and certainly Statistic Canada's central role is to offer high-quality
data in support of analysis and decision making. But the opposite is equally
true, if not as obvious: good data requires good analysis. That is to say, new
analytical frameworks often highlight the need to organize existing data in
different ways, as well as the need for the development of new types of data.
This is certainly one of several reasons that Statistics Canada has sought to
develop a strong analytical capacity, and to maintain strong ties with the research
community. This book is meant to contribute to this process by examining Canadian
data through the lens of Generational Accounting, and by analyzing some of the
issues that arise.
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