Canada’s real problem isn’t job losses, it’s the rush to retire
Canada’s workforce grew in August, but has fallen back in the past two months and has remained smaller than it was before the summer, when tens of thousands of people simply stopped working. Much of this can be attributed to the fact that more Canadians are retired than ever before, according to Statistics Canada.
It’s not just people over 65 who pack their desks and attach their tool belts. A record number of Canadians between the ages of 55 and 64 are now confirmed
The port they’ve retired at in the past 12 months, according to Statscan data. Draw: https://tmsnrt.rs/3RVXvNM
Chart: Canadians are retiring en masse –
Economists say this is accelerating the mass exodus of highly skilled Canadian workers, leaving companies in trouble, raising wages and threatening a further decline in the country’s productivity.
“We have known for a long time that this wave is coming, and that we will be in this moment,” said Jamie Jane, chief economist at Desjardins group. “It will intensify in the coming years.”
“The risk that you’re facing, and in some sectors you can actually see, is that people will leave without enough young workers to take over. So there is a loss of human capital and knowledge.”
Retirement rates have fallen during the pandemic as many Canadians decide to work longer. With restrictions lifted, many are rushing to make up for lost time and continue to travel and spend more time with their families.
Their departure will shrink the workforce, potentially affecting economic growth at a time when the central bank is aggressively raising interest rates to stem spiraling inflation, fueling fears the economy is sliding into recession.
Canada – which has ramped up immigration to boost economic growth – has the largest labor force, as a percentage of the total population, of the G7, but at the same time, the workforce has not been this old, according to Statscan (
). One in five workers in Canada is 55 or older. Draw: https://tmsnrt.rs/3RTcMyJ
Chart: Canada’s workforce is aging fast –
In August, there were 307,000 Canadians who left their jobs to retire last year, up 31.8% from the previous year and 12.5% higher than in August 2019, before the pandemic.
Adding to the problem, more than 620,000 Canadians moved into the 65+ age group during the pandemic, a 9.7% increase in the population. Despite job losses for three consecutive months, job vacancies remain well above pre-pandemic levels.
Believers and doers
The problem of retirement is particularly acute in skilled occupations such as trade and nursing. Canada has lost 34,400 healthcare jobs since May, even though a record number of nurses reported working overtime.
Catherine Hoy, president of the Ontario Nurses Association, said these were not jobs being eliminated, but people retiring.
“It’s a big problem right now because we have a lot of people who have retired unexpectedly,” she said, referring to the pandemic, working conditions and a wage dispute with Canada’s largest province.
The transportation sector is also facing a serious labor shortage, due to the rush for more goods due to the pandemic and an aging workforce.
“More and more drivers are getting older, and therefore retiring or considering a different lifestyle,” said Tony Ridder, owner of Trans Canada College, a vocational school that trains truck drivers for transportation.
At the same time, demand has risen sharply from trucking companies, many of which hire trained drivers for on-the-job training and then immediately hire them once they receive their full licenses, Reeder said.
“Without trucks and people driving trucks… the goods will remain in ports and warehouses instead of reaching their destination where they can be consumed,” he said.
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