Ottawa – Al Carmel
More than a year after the Great Retirement took hold in the United States, Canada is struggling with its own grayer version: the Great Retirement.
Canada’s labor force grew in August, but it declined over the previous two months and remains smaller than before the summer as tens of thousands of people simply stopped working. Much of this is because more Canadians are retiring than ever before, Statistics Canada said.
It’s not just the over-65s who are packing up their offices and hanging up their tool belts. A record number of Canadians aged 55 to 64 now say they have retired in the past 12 months, Statscan data shows.
That is accelerating a mass exodus of Canada’s high-skilled workers, stumbling businesses, helping to soar wages and threatening to further hurt the country’s flagging productivity, economists say.
“We knew a long time ago that this wave was coming, that we were going to get into this moment,” said Jimmy Jean, Desjardins Group’s chief economist. “And it will only intensify in the coming years.”
“The risk you have, and you already see it in some sectors, is people leaving without there being enough younger workers to take over. So there is a loss of human capital and knowledge.”
During the pandemic, pensions fell as many Canadians decided to stay in their jobs longer. With restrictions now lifted, many are rushing to make up for lost time by traveling and spending more time with family.
Their departures are leading to a contraction in the labor force, which could weigh on economic growth at a time when the central bank is aggressively raising interest rates to counter rising inflation and fueling fears that the economy will slide into recession.
Canada — which has increased immigration to spur economic growth — has the largest working-age population by total population in the G7, but at the same time its workforce has never been older, according to Statscan. One in five workers in Canada is 55 or older.
According to Statscan, in August there were 307,000 Canadians who had left their jobs to retire sometime last year, up 31.8% year-on-year and 12.5% from August 2019 before the pandemic hit.
Additionally, more than 620,000 Canadians entered the 65+ age category during the pandemic, representing a 9.7% increase in this demographic. Despite three consecutive months of job losses, job vacancies and job postings remain well above pre-pandemic levels.
The pension problem is particularly acute in qualified occupations such as trades and nursing. Canada has lost 34,400 healthcare jobs since May, despite a record number of nurses working overtime.
These aren’t jobs being cut, they’re people retiring, said Cathryn Hoy, president of the Ontario Nurses’ Association.
“It’s a huge problem right now because we’ve had so many people retiring unexpectedly,” she said, citing the pandemic, working conditions and a wage dispute with Canada’s largest province.
The transportation industry is also struggling with severe labor shortages, both from the pandemic-driven greed for more goods and an aging workforce.
“More and more drivers are aging and as a result are retiring or considering a different lifestyle,” said Tony Reeder, owner of Trans-Canada College, a trade school that trains truck drivers.
At the same time, demand is booming from trucking companies, many of whom hire learner drivers for on-the-job training and then hire them directly once they’re fully licensed, Reeder said.
“Without trucks and people driving trucks, goods will lie in ports and warehouses instead of getting to the destination where they can be consumed,” he said.