Canada’s real problem is not job loss, but the rush to retire

Canada’s labor force grew in August, but as tens of thousands of people simply stopped working, it fell in the previous two months and remains smaller than before the summer. This can be attributed to the fact that more Canadians are retiring than ever before, according to Statistics Canada.

The over-65s aren’t the only ones packing up their offices and strapping on their tool belts. The record number of Canadians aged 55-64 has now been reaffirmed
According to Statscan data, they have retired in the past 12 months. Graphic: https://tmsnrt.rs/3RVXvNM

Chart: Canadians Retiring Total –

That’s hastening a mass exodus of Canada’s most skilled workers, putting businesses in trouble, threatening wage hikes and further declines in the country’s productivity, economists say.

“We’ve known this wave was coming for a long time and we’re going to be in this moment,” said Jimmy Jean, chief economist at Desjardins Group. “It’s going to intensify in the coming years.”

“The risk you have, and you can already see it in some sectors, is that people will leave without enough younger workers. So there’s a loss of human capital and knowledge.”

Pension rates fell during the pandemic as many Canadians decided to work longer. With restrictions lifted, many are rushing to make up for lost time, continue traveling and spend more time with their families.

Their departures will stoke fears the economy could slip into recession and reduce the labor force that can weigh on economic growth at a time when the central bank is aggressively raising interest rates to stem rising inflation.

Canada — which has ramped up immigration to boost economic growth — has the largest workforce of the G7 as a percentage of the total population, but at the same time, according to Statscan, the workforce has never been this old (
) One in five workers in Canada is 55 or older. Graphic: https://tmsnrt.rs/3RTcMyJ

Chart: Canada’s workforce is aging rapidly –

In August, 307,000 Canadians left their jobs to retire last year, which was 31.8% more than a year earlier and 12.5% ​​more than in August 2019, before the outbreak of the pandemic.

Adding to the problem, more than 620,000 Canadians moved into the 65+ age bracket during the pandemic, a 9.7% increase in that population. Despite three consecutive months of job losses, job openings and vacancies remain higher than pre-pandemic levels.

Insurers and maintainers

The pension problem is particularly acute in skilled trades and nursing. Canada has lost 34,400 health care jobs since May.

Those jobs aren’t being cut, but people are retiring, said Catherine Hoy, president of the Ontario Nurses Association.

“It’s a big problem right now because we have a lot of people who have unexpectedly retired,” he said, referring to the pandemic, working conditions and wage dispute with Canada’s largest province.

The transportation sector is also facing severe labor shortages due to the rush for more goods caused by the pandemic and an aging workforce.

“More and more drivers are getting older and either retiring or considering a different lifestyle,” said Tony Reeder, owner of Trans-Canada College, a vocational school that trains truck drivers for transportation.

At the same time, demand has skyrocketed from trucking companies, many of which hire trained drivers for on-the-job training and then hire them immediately after they’re fully licensed, Reeder said.

“Without people to drive the trucks and lorries… goods will be consumed at ports and warehouses instead of reaching their destination,” he said.