Graying of Canada’s workforce threatens to worsen labor crunch

By Anna Mehler Paperny

TORONTO – Canadians nearing retirement outnumbered those entering the workforce by a record margin in 2021, census data released on Wednesday showed, raising fears the country’s labor shortage could worsen in coming years.

Although Statistics Canada expects the gap to shrink before growing again around 2036, it warned that working-age Canadians’ share of the population was falling. Meanwhile, the number of those aged 85 and older is projected to triple by 2051.

“We have reached a stage where the working-age population has never been older,” said Julien Bérard-Chagnon, senior analyst with Statistics Canada’s Centre for Demography.

More seniors are working at least part-time and they are helping their children and grandchildren, Bérard-Chagnon said. But the shrinking workforce as a share of the population will present economic and fiscal challenges nonetheless, he said, creating a greater need for healthcare workers, for example – a field already in short supply.

“It concerns everybody.”

As Canada faces a labor crunch – the unemployment rate fell to 5.3% last month – its government is increasingly relying on temporary residents – a quick fix some economists argue depresses wages and makes migrants vulnerable to exploitation.

Earlier this year the federal government announced it was further expanding its temporary worker programs, lifting limits on low-wage positions in seasonal industries and allowing certain sectors to hire up to 30% of their workforce through low-wage temporary foreign work, among other measures.

Retirement-age residents make up a smaller share of Canada’s population than in Germany, France, Italy and Japan, but it is larger than in the United States and United Kingdom, Statistics Canada said.

The findings are “a warning shot across the bow” to Canada’s government, said Armine Yalnizyan, an economist. She said they showed an imminent need to improve training and working conditions to optimize the workforce.

“We could be maximizing the potential of the people in our midst far more effectively, but we need a plan to do that. It doesn’t just happen.”