The Ecological Economics of Canada’s Ageing Population Eric Miller Presented Nov 1, 2013 at York University Canadian Society for Ecological Economics Conference

A Conceptual Ecological Economic Demographic Model (Inspired by NEF, 2012)

An Empirical Model for Canada

Current patterns as model inputs (StatCan, 2012) Lifetime Fertility Rate = Total emigrants = 52,409Total immigrants = 258,290 Average Life Expectancy at birth: M = 78.6yrs, F = 82.7yrs

Possible futures as assumptions (StatCan, 2010) Population Scenario Lifetime FertilityImmigration Rate Gain in Average Life Expectancy at Birth 1: Low growthFalls to 1.5Lower (0.6% / yr) Slower than historic trends (15 years slower) 2. Medium growthStays at 1.7Current (0.8% / yr) Historic trends (+7M, +5.7F by 2043) 3: High growthRises to 1.9Higher (0.9% / yr) Faster than historic trends (7 years earlier) 4: StabilizationStays at 1.7 Equals migration (0.15%) Historic trends

Results of Canadian demographic scenarios Scenarios: 1=Low, 2=Med, 3=High, 4=Stabilization

The Hypothesis of Apocalyptic Demography “Today, there are 4.2 working-aged Canadians for every senior citizen, making contributions to cover retirees' pensions and health care. By 2031, that ratio will be cut in half. The tax base will shrink, growth will slow and labour shortages will become even more dire...”

Demographic (age-based) dependency Medium growth scenario

Labour market dependency Medium growth scenario

What about unpaid work?

Effects of population growth on dependency Growth scenarios: 1 = Low, 2 = Medium based on trend of last 20 years, 3 = High Stabilization: 4 = Medium trend with balanced migration, 5 = Same with “delayed retirement” __154=Value in 1971___________________________________________ __89=Value in 1971____________________________________________

Understanding the dynamics of Canadian housing Demographics  Household formation & dissolution Macro-economics  Rates of change in household formation Affluence  Demand for number of dwellings, and value Financial system  Cost of financing, risk tolerance of lenders Expectations of capital gains  Willingness to inflate prices Cohort norms  Value of strategic locations Results impact the stock of residential dwellings and market value their land

An empirical Canadian housing model

Dynamics of residential land value 1=Actual total Res Capital Stock 2=Actual Res structures 3=Actual Res land Modelled values: 4=Predicted Res structures 5=Predicted Res land $M CAD

Dynamics of investment in residential structures 1=Actual rate of gross investment in Res Capital Stock 2=Modelled rate (of #1) 3=Modelled rate of invest from renovations to existing structures; 4=Other 5=Modelled rate of investment from new structures Annual Rate

Speculating about future housing dynamics Growth scenarios: 1 = Low, 2 = Medium based on trend of last 20 years, 3 = High Stabilization: 4 = Medium trend with balanced migration, 5 = Same with “delayed retirement” (all scenarios assume 2010 patterns of household headship rates)

Concluding messages Demographics should play an important role in EE Beware of apocalyptic demography in Canada as a new rationale for austerity and growth for the sake of growth Systems dynamics modelling useful for modelling residential housing market (structures and land value) Understanding housing will help to understand an important component of life satisfaction during working years and into retirement, and the future ecological implications of growth in households, dwellings per household, and value per dwelling

References cited Globe and Mail The great expansion. Saturday May 4. Section F. New Economics Foundation Happy Planet Index: 2012 Report. A global index of sustainable well-being. All other Statistics Canada data is from CANSIM