Canada’s labor force grew in August but shrank in the previous two months and remains smaller than before the summer as tens of thousands of people simply stopped working. Much of that can be attributed to more Canadians retiring than ever before, Statistics Canada said. It’s not just the 65-and-over crowd packing up their desks and hanging up their tool belts. A record number of Canadians aged 55-64 now report retiring in the past 12 months, the agency’s data shows. That’s hastening a mass exodus of Canada’s most skilled workers — leaving businesses scrambling, contributing to sharp wage growth and threatening to further slow the country’s productivity decline, economists say. “We’ve known for a long time that this wave was coming, that we were going to get into this moment,” said Jimmy Jean, chief economist at Desjardins Group. “And it will only intensify in the coming years. “The risk you run into – and in some sectors you’re already seeing it – is that people leave without enough younger workers to take over. So there’s a loss of human capital and knowledge.”
The pandemic has delayed some retirement plans
During the COVID-19 pandemic, retirements declined as many Canadians decided to stay in their jobs longer. With restrictions lifted, many are rushing to make up for lost time, choosing to travel and spend more time with family. Their departures are shrinking the labor force, which could weigh on economic growth at a time when the central bank is aggressively raising interest rates to tackle runaway inflation, fueling fears the economy will slide into recession. Canada — which has increased immigration to help economic growth — has the largest working-age population as a percentage of the total population in the G7, but at the same time its labor force has never been larger, according to Statistics Canada . One in five workers in Canada is 55 or older. There were 307,000 Canadians in August who had left work to retire at some point in the past year, a 31.8 per cent increase from a year earlier and 12.5 per cent higher than in August 2019, before the start of pandemic, according to the agency. he said. Adding to the problem, more than 620,000 Canadians entered the 65+ age bracket during the pandemic, a 9.7 per cent increase in this population group. Despite three straight months of job losses, job vacancies and layoffs remain well above pre-pandemic levels.
Nurses and truckers
The retirement problem is particularly acute in skilled sectors such as commerce and nursing. Since May, Canada has lost 34,400 health care jobs, even as a record number of nurses reported working overtime. It’s not about job cuts, it’s about people retiring, said Catherine Hoey, president of the Ontario Nurses Association. “It’s a huge problem right now because we’ve had so many retire unexpectedly,” he said, citing the pandemic, working conditions and a wage dispute with Canada’s largest province. The transportation industry is also facing a severe labor shortage, both due to the pandemic-induced frenzy for more goods and as the workforce ages. “More and more drivers are getting older and therefore retiring or considering a different lifestyle,” said Tony Reeder, owner of Trans-Canada College, a career college that trains truck drivers. At the same time, demand is growing from trucking companies, many of which hire student drivers for training courses and then hire them as soon as they are fully licensed, Reeder said. “Without trucks and people driving trucks … goods will sit in ports and warehouses as opposed to reaching their destination where they can be consumed,” he said.
