Workforce getting older, more reliant on immigrants: StatsCan

The demographic makeup of the Canadian labour force is set to evolve in the years ahead, according to a new study from Statistics Canada, which forecasts that the workforce will be getting older, more reliant on immigrants and increasingly prone to shortages in certain sectors.

StatsCan published a study on Wednesday that provides its projections for the Canadian job market of 2036. With the Baby Boomer generation entering their retirement years, the national statistical agency reports that the labour force participation rate had already declined from 68% in 2008 to 66% in 2017 — and it predicts that it will fall to between 61% and 63% by 2036.

In turn, this will have “important consequences for the Canadian economy,” the report says. “With more people leaving and fewer people entering the labour market, some sectors face the prospect of labour shortages. A lower overall participation rate will likely put pressure on fiscal revenues, which fund essential social and economic services and programs.”

These pressures would likely be even more significant if not for immigration, and people staying employed longer than they did in the past — both factors that are bolstering the workforce.

For instance, StatsCan says the participation rate among men approaching retirement age (aged 60 to 64) rose from 43% in 1995 to 61% in 2017, and for older women, the rate has more than doubled, from 23% to 49% over the same period.

Looking ahead, StatsCan’s report suggests that these trends will continue. It notes that immigrants represented about 25% of the Canadian workforce in 2016, and that this could grow to more than 33% by 2036.

Similarly, older workers (aged over 55) accounted for 21% of the workforce in 2017, and this is projected to rise to 25% by 2036. Back in 1976, only 11% of the workforce was over age 55, the report notes.

“There are multiple factors associated with the increase in the labour market participation of seniors, including better health and longer life expectancy, higher levels of education and their financial situation,” the report says.

StatsCan also says that there will likely be regional differences to these effects. For instance, it projects that immigrants will make up an even bigger share of the workforce in major cities, such as Toronto and Vancouver, which are popular destinations for new Canadians. In Toronto, immigrants are forecast to represent 57% of the workforce by 2036.

“In these large urban areas, high immigration as well as the migration of young adults from other regions of Canada would partially offset the effects of population aging,” the report says.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.