July 13, 2007, 1:25 am

The After Baby Boom

by: The Financial Blogger    Category: Miscellaneous
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Recently, milliondollarjourney wrote an article on how Governments are getting keen on tax credit for a young family. I can’t complain myself as I just receive another $300 in my bank account this week. In addition to that, I printed the form that will make me eligible for another $2000 tax credit per child under 18 starting on July 1st. And did I mention that we are expecting another child by the end of this month? The government will allow me to take up to 5 weeks at 70% of my salary so I can help my wife with our 2 years old son and our newborn baby girl. This surely encourages young families to have children. To my opinion, having such a generous government is a little bit fishy.

 

In fact, when you think about it, all those cheques sent were made for one purpose. Create another baby boom. I can’t blame them to help me out growing my family. I’m glad they are doing it actually. But there is more. As years are flying by, most baby boomers are getting closer to retirement. If they don’t retire completely, they will surely work less and earn less income. As the population is aging, health care cost will skyrocket, total earned income will decrease as pension will increase and therefore, less money will come in the Government’s pocket.

 

There are not many ways to increase the Government’s income. They have to main options; raise taxes (like there is still room on that option!) or increase the amount of people paying taxes. Therefore, they will encourage immigration by promoting our country across the world. I think that little needs to be done on this part as we are living in a beautiful country.

 

The other solution is to increase newborns within the existing population. This is the best catch-up solution they could find. While they will get more tax payer in a few years, people won’t complaint of receiving tax credit and extra money to pay for their babies’ expenses. It is a win-win situation where the governments avoid answering why they didn’t do anything to prevent the huge gap between generations.

 

I am concerned that it might be too little too late to compensate for the cost of health care programs and other expenses related to an aging population. Another solution would be to welcome private health care in our society. There are good and bad points but this goes behind the scope of this post.

 

Hopefully, those measures will help out our economy in the future. For the time being, I will enjoy every second with my family and gladly take the money I am offered. Do you really think that we will have a pension when our generation retire? I’m not convinced we will be able to pay more than our food with it!

 

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Comments

Congrats and good luck with the baby girl!

Mike

by: The Financial Blogger | July 13th, 2007 (4:35 am)

Thx!
My wife is already open at 2,5 cm so I guess it can be anytime now….

What is this “to take up to 5 weeks at 70%” ? I had a boy in Feb. and will be taking a paternity leave in fall – but I thought there was just the EU for 1 year that would be split between my wife and I

by: The Financial Blogger | July 13th, 2007 (4:01 pm)

In Canada, for every baby born after January 2006, fathers can take 3 or 5 weeks of parental leave on top of the 50 weeks of maternal leave. It adds up to your normal vacation weeks.
Cheers,
FB.

I tried to find out some details on this, but couldn’t. Could you provide a link or what this program is called.

Thanks

by: The Financial Blogger | July 16th, 2007 (2:55 am)

Hi Joel,
I was surprised to find out that this program might only be in Quebec… As I lived there, I thought it was for all Canadians. Here is the link :
http://www.rqap.gouv.qc.ca/prestations/index_en.asp#paternite
How many weeks do you have for paternity leave?
Cheers,
FB.

The credits are partly to incent population growth and partly to get votes. As you correctly mention, the old folks outnumber the young folks. Normally the larger upcoming generations support the smaller retired population. Basically the working age people now are at a bit of a disadvantage because we have to support the retired, who will soon be very huge in number relative to us. Quebec is more pro-active at giving parental benefits because they have the added intention of increasing the French-speaking population through kids and through immigration from French speaking countries.

In Quebec you pay a ton of taxes, but if you have kids then you may be ahead relative to the other provinces.