Canadian Manufacturing

Census shows Canada’s ‘demographic dividend’ is coming to an end

A "demographic dividend" is owning a growing labour force while other country's shrink, and Statistics Canada says we have just a few years to enact policies that will stop the coming crush of retirements from triggering an economic slowdown



OTTAWA—After nearly four decades in the workforce, 64-year-old Louise Plouffe is looking ahead to retirement. But Tristan Plummer, 23, is looking for work.

Plouffe and Plummer represent opposite ends of the age demographic that defines the Canadian labour force, which is in the throes of unprecedented change, according to Statistics Canada’s latest census figures released May 3.

The proportion of Canadians aged 15 to 64 grew just 0.4 per cent between 2011 and 2016, its lowest rate since 1851, comprising 66.5 per cent of the population.

The agency expects that proportion to decline to about 60 per cent by 2031, when the youngest baby boomers turn 65. By then, the proportion of seniors domestically would rival the level currently seen in Japan, currently home to the oldest population in the G7.

That gives Canada a few more years to benefit from what Statistics Canada calls a “demographic dividend”: a growing labour force while other countries watch theirs shrink. Eventually the numbers will decline in Canada as well, once populations age and retirements take hold, said Statistics Canada demographer Andre Lebel.

Projections about how long Canada will benefit from those dividends depends in part on immigration, which is the key to the modest gains thus far in the labour force, said Doug Norris, chief demographer at Environics Analytics.

Much will also depend on the sorts of policy decisions officials have wrestled with for years as they seek to prevent a coming crush of retirements from triggering an economic slowdown.

Wednesday’s figures, the second batch of numbers from last year’s census, focused on the age and sex of the country’s population—the latest layer of a national portrait that Statistics Canada is painting throughout the year with the five-year data gathered in 2016.

The ranks of seniors grew by 20 per cent between 2011 and 2016, the fastest rate the census has recorded in 70 years, the numbers show. The census counted 5.9 million seniors and 5.8 million youth in 2016, marking the first time there were more Canadians over 65 than 14 and under.

Plouffe, who happens to be director of research with the International Longevity Centre Canada at the University of Ottawa, said governments need to tap into that growing natural resource and find ways to help older workers stay in the workforce for as long as they need.

“It’s novel in human history. Older people are healthier than they have been in the past and represent a tremendous resource,” she said.

“Policies have to be adapted to help people remain healthy, active and independent as long as possible.”

The federal government has been considering options since shortly after taking office. A draft briefing note to Social Development Minister Jean-Yves Duclos, dated October 2015, made a key point: Canada is among a minority of OECD countries where 65 is the age of eligibility for public pensions. Among 34 OECD countries, 23 countries have either increased the age or plan to do so.

Retirement ages “will be at least 67 by around 2050 in most OECD countries,” officials wrote in the document, obtained by The Canadian Press under the Access to Information Act.

Plummer, who lives on Toronto’s eastern flank in the region still known to many as Scarborough, says he routinely bumps into older workers who are stalling their retirement for various reasons.

The common perception is that older workers staying in the labour market longer are going to make it harder for Plummer to find a good job, but research suggests otherwise, says Vass Bednar, who headed the federal government’s expert panel on youth employment.

“When we are talking about older people exiting so that younger people can move up, I think intuitively that only works if you think about those kinds of hyper-formalized, almost old-school firms,” Bednar says, pointing to banks and governments as examples.

Federal research released to The Canadian Press paints a nuanced picture of local labour markets.

Rural, resource-rich areas of the country like Alberta or northeastern B.C. have a positive impact on employment rates for young and old. The census data show that growth was high in some of the economic regions that make up these areas: a 2.2 per cent jump in northeastern B.C., and 11-point-plus increases in Edmonton and Calgary.

Researchers from Employment and Social Development Canada also found that employment opportunities in Atlantic Canada, which saw the largest drop in the proportion of people 15 to 64 in the census, remain low for everyone.

And in a finding that bucked national trends, youth employment rates in major cities like Toronto and Montreal remained low, with the opposite finding for older workers.

The researchers believed this was due to a few factors, including fewer opportunities for young people who leave school compared to those who do so in resource-rich areas. They also concluded that older, white-collar workers living in urban centres like Toronto and Winnipeg stay in the labour force longer, boosting their employment rates.

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