Canada faces record retirements, historic labour shortage
Canada is facing a record wave of retirements as one in five Canadians near the end of their working lives in a country already grappling with labour shortages and historically low unemployment.
A Statistics Canada study based on the 2021 census finds that Canada’s working population has never been older. Almost 22 per cent of the population is between 55 and 64, an all-time high in the history of the census.
Canadians aged 15 to 64 drive the economy and, at 64.8 per cent, this age group still represents one of the highest in the G7. Less than 60 per cent of Japan’s population, for example, is within working age.
But things are about to change as the last of the baby boomers leave the workplace and fewer young people step up to replace them. By 2051, the proportion of working age Canadians is expected to fall to 60 per cent.
“An increase in immigration — even a large one — would not significantly curb this projected drop,” said Statistics Canada.
Between 2016 and 2021, the number of children under the age of 15 grew at a pace six times slower than the number of people 65 and older.
During that time, the number of people 65 and over rose 18.3 per cent to 7 million, the second largest increase in 75 years. The largest was a 20 per cent gain between 2011 and 2016.
One of the big reasons for the shift is the surge in aging baby boomers — a demographic bubble seen coming for years — is finally here. That has been topped off with low fertility and the gradual increase in life expectancy, said the study.
The fertility rate has been slipping since 2016, reaching a historic low of 1.4 children per woman in 2020. Statistics Canada says a further decline is possible as one in five women reported they wanted to delay having children because of the COVID-19 pandemic.
The shift will have a big impact on Canada’s society and economy, putting more pressure on health-care and pension systems.
It will also change the face of Canada’s workforce, which is becoming more educated and diverse, said the study. Younger generations also have different expectations about job flexibility and work-life balance.
More older people, however, are choosing to stay in the labour market longer than in the past, which could offset labour shortages.