The recent release of the 2011 census data revealed that Canada’s population is aging rapidly, with the number of residents aged 65 and over growing by 14% between 2006 and 2011 to nearly five million people.
This growth rate was much higher than in the working-aged segment (15 to 64) and the population as a whole, both of which grew by only 6%. By 2011, seniors accounted for a record 15% of the Canadian population; there are – for the first time – more people in the labour force exit stage of life (those aged 55 to 64) than in the labour force entry stage (aged 15 to 24).
While surprising to some, many of the headlines about Canada’s greying population were also seen following the release of the 2006 census data, when the seniors population had grown to a then-record 14% of the population. The reality is that our population has been aging ever since the last of the baby boomers were born during the mid-1960s.
The impacts of it are becoming increasingly noteworthy. With the leading edge of the boom generation having celebrated their 65th birthdays in 2011, Canada is entering its third great demographic transition. As such, issues of health-care funding, labour supply and immigration have again become newsworthy.
Of particular interest to policymakers, employers and residents alike is the future level of immigration that will be required to fill in for the boomers as they retire.
Of the 19.2 million people active in the labour force today, aging, prevailing trends in birth and death rates and today’s labour force participation rates would reduce the Canadian labour force to 16.6 million by 2041 – a 14% drop in the number of people working.
Assuming that immigration increases into the range of 330,000 people per year (up from 250,000 today), net immigration would increase the labour force to 22 million participants by 2041 from 19.2 million today – a 15% increase.
Accounting for trends in age-specific participation, namely the boomers beginning to work beyond traditional retirement milestones, Canada’s labour force would grow to 24.2 million by 2041 or 26% larger than it is today. Therefore, relative to the number of people in the labour force today, aging and mortality would take away 2.6 million workers, immigration alone would add 5.4 million and lifestyle changes – as represented by increasing participation – would add another 2.2 million.
Without realizing the projected levels of immigration and increasing participation, Canada’s labour force would begin to shrink within the next decade.
While a growing population and increasing labour force participation rates will be required to avoid a demographic torpedo to our economy, significant increases in labour productivity will also be required to maintain our current standard of living.
With annual growth in Canada’s labour force projected to fall below 1% by 2017 – and further to almost 0.5% by 2041 – realizing annual growth in our economy that’s in excess of this rate can be achieved only through significant gains in productivity.
In a local context, a growing population (and, more specifically, a growing younger population) in the Lower Mainland is almost assured, as the region receives a significant migration flow from international and domestic sources. Similarly, participation will continue to increase as longer life expectancies extend the working stage of the lifecycle.
Increases in productivity, however, are less certain and far more challenging.
For example, increasing labour productivity in the Lower Mainland could be more challenging because most jobs in the region (and in many other metro regions) are found in the service sector, where it’s harder to increase productivity.
In 2011, 83% of
From an employer perspective, given the changing nature of the region’s demography, it will be fundamentally important for all businesses to recognize, support and foster the “three Ps”: a growing population, increasing participation and growing productivity. This means that greater emphasis will be put on recruitment, retention and retraining (the three Rs) if businesses are going to successfully navigate the coming demographic challenges.
From an employee perspective, it means a growing range of opportunities and choices as people enter, or reinvent themselves, within the labour market. •
