Encourage seniors to keep working

Out with the old, in with the young? That’s certainly been the thinking for generations of workers who wanted to retire early and were happy to give way to younger, more energetic employees.

But things have changed. Canadians are living longer, healthier lives. Many want to remain actively engaged. At the same time, many are concerned they won’t be able to afford retirement because of inadequate pensions or savings. No wonder a growing number of seniors would like to continue on in the workforce, as many surveys have found.

Yet a perverse system of incentives discourages seniors from working. This is a problem not simply for older people who want to stay in the workforce, but for the economy as a whole. Despite valid concerns about current youth unemployment, as the population continues to age economists say there won’t be enough young people to fill jobs in the workforce in coming years.

There is some urgency on this front. Last week Statistics Canada confirmed that the percentage of Canadians over 65 (16.9 per cent) is now greater than those aged 15 and under (16.6 per cent).

Fifty years ago, at the height of the baby boom, seniors comprised less than eight per cent of the population and the youngest group was fully 34 per cent. By 2031 those over 65 are expected to make up about 23 per cent of the population, similar to today’s Japan, the world’s “oldest country.”

With all of this in mind, the Trudeau government’s economic advisory council recommended earlier this year that Ottawa raise the age of retirement eligibility to keep seniors in the workforce longer.

The Harper government tried to do just that, raising the age when old-age benefits kick in from 65 to 67, but the Trudeau Liberals rightly overturned that policy. They should stay the course.

Government policy should not penalize seniors who don’t want to work by making them wait longer for their pensions. Nor does providing seniors with pensions discourage them from working as much as one would think, says Andrew Jackson, a senior policy adviser with the Broadbent Institute, which has studied the issue.

Instead, the government should encourage Canadians to stay in the workplace with carrots, not sticks.

One inducement, sensibly recommended by the economic advisory council, would be to allow Old Age Security and Canada Pension Plan deferrals beyond age 70 and ensure that deferrals past 65 are more attractive than they are now. As it stands, deferrals barely increase the amount of guaranteed income pensioners will have over their lifetime.

A second suggestion is to make it easier for older workers to go back to school to upgrade their skills or learn new ones to adapt to a changing workplace.

For too long there has been a culture of pushing seniors out the door or encouraging them to leave through buyouts to make room for the young. That may have seemed necessary in the past, but it doesn’t reflect our current challenges.

Now the government must act to ensure that the many seniors who want to stay in the labour market are also able to do so.