The fantasies of the “good life” in my teenage years got me thinking about certain countries as almost perfect. Canada, and a few European nations too, were places where life seemed orderly, safe, and prosperous. High-quality healthcare, clean cities, generous welfare, and social stability—it all felt like a blueprint for success. I assumed these countries had figured it out.
But over the past decade, the cracks couldn’t be clearer. That “niceness” isn’t just there automatically. It’s fragile, built on a balance of money, population, and public services. And when that balance shifts, the reality hits hard. Canada, in particular, has shown me how even the most ideal places aren’t immune to practical pressures.
The problem is straightforward but often overlooked: demographic change. For decades, Canadians have been having fewer children. Today, the average woman has about 1.3 children—far below the 2.1 needed for a population to replace itself. On paper, this might seem minor. But in a welfare state, the math matters: each working-age person supports themselves and contributes taxes that pay for pensions, healthcare, schools, and infrastructure.
In welfare states, this matters more than we often realize. Without enough working-age people, the very foundation of the welfare system begins to crumble.
In the 1970s, Canada had seven workers for every retiree. Today, that number is closer to three. By the 2030s, projections suggest only two workers per retiree. That means two people will carry the financial weight of not just themselves and their children, but also the healthcare and pensions of one older citizen.
And that’s before schools, roads, or debt are considered. Healthcare alone consumes nearly 40 cents of every provincial budget dollar, and as life expectancy rises, that number only grows. Without young taxpayers, the system strains.
So, what to do when birth rates fall? Wait twenty years and hope families start having more children? Politically, that’s a nonstarter. Canada chose the shortcut: mass immigration. Over the past decade, the country welcomed more people, faster, than almost any other developed nation. In 2022 and 2023, Canada admitted over 430,000 permanent residents each year, plus hundreds of thousands of temporary workers and students. In relative terms, it’s like the U.S. suddenly taking in four to five million newcomers annually.
The immediate effects looked positive. Population growth soared, businesses filled vacancies, and the average age dipped slightly. Canada even became the fastest-growing G7 nation. But the side effects quickly became visible. Adding millions of people to a system designed for far fewer residents places immense pressure on housing, infrastructure, and public services—systems that take decades to expand.
Housing was the first and most obvious problem. Between 2015 and 2023, Canada added roughly 3.5 million people but only 1.8 million new homes. The result: Toronto and Vancouver now have some of the most expensive housing in the world relative to income. Young Canadians struggle to buy homes, while rents climb at double-digit rates in many cities.
Infrastructure and public services are similarly stressed. Transit, hospitals, and schools are overcrowded. In many provinces, patients wait six months or more for surgeries, and finding a family doctor has become a luxury. The labor market also shows the effects: wages stagnate in sectors relying on temporary foreign workers, while some industries benefit from a steady supply of inexpensive labor.
Canada’s approach can be seen as a shortcut, arguably a necessary one. It solved one problem, aging demographics, but created another: rising housing costs, growing inequality, and public frustration. Now the country faces a difficult dilemma. Keep welcoming newcomers at this scale, and the strain on housing and infrastructure only worsens. Slow immigration, and the welfare state runs into the original problem, too few workers supporting too many retirees.
Policymakers could also adjust the welfare model, raising retirement ages, increasing taxes, or cutting benefits, but those options are politically painful. Encouraging domestic birth rates might help, yet initiatives like subsidized daycare have barely moved the needle. In the end, fertility isn’t just about money; it’s about culture, confidence, and long-term security.
So what’s next? Likely, Canada will adopt a mix of solutions: continued immigration, incremental welfare adjustments, and policies to encourage families. But the balance is delicate. If immigration stays high without fixing housing and services, younger generations may lose faith in the system. If immigration slows too much, the fiscal math collapses.
Canada’s approach is a bold experiment in pragmatism. It bought time, but time itself isn’t enough. Without rapid expansion of housing, infrastructure, and social services, the country risks undermining the very stability and prosperity that made it attractive in the first place.
The lesson extends beyond Canada. Even nations that seem close to ideal cannot escape the practical pressures of demographics and economics. The “good life” requires more than wealth or policy; it demands a constant, careful balance between growth, resources, and the social contract. Shortcuts, however well-intentioned, always have consequences.
