Canada’s aging work force at the root of national labour shortage

When Dan Gallagher looks around his company, he sees a lot of retirement parties in his future.

While it’s not something he formally tracks, the CEO of Mikisew Group — a Fort McMurray, Alta.-based company that specializes in oilsands site services, maintenance, logistics and construction — knows he’s got more employees approaching the end of their careers than just starting out.

“I take a walk around our shop, and around our field services workforce, and I can clearly see that demographic. It’s aging,” Gallagher said.

The implications of that make him nervous.

Mikisew Group is already struggling with a shortage of labour, even recruiting as far away as Australia just to keep its fleet of heavy equipment moving. And basic demographics suggest the company’s problem is set to get worse, not better.

“The ratio of apprentice to older worker here has been so low for so long that there just isn’t the bench strength to offset the people who are leaving,” Gallagher says.

This country’s labour force growth rate has been trending downward since 2000, but the trend has intensified in recent years. This “grey wave” has been on the horizon for a while, but experts say it’s now crashing ashore.

According to Statistics Canada, between 2016 and 2021 more than 1.4 million Canadians entered the ranks of those aged 55 and older.

Last year alone, one in five Canadians of working age were aged 55 to 64 — an all-time high in the history of the Canadian census.

“It’s like a truck pulling up in your rear-view mirror. You see it there, and it’s moving slowly, and then you look away for a while and suddenly it’s completely on your tail,” said Mike Holden, chief economist for the Business Council of Alberta.

The arrival of the grey wave is occurring at the same time that businesses of every size, in every industry, and in every province are complaining of labour shortages. As of the second quarter of 2022, there were more than a million vacant jobs in Canada — the highest quarterly number on record.

That’s not a coincidence. While the COVID-19 pandemic did disrupt labour markets, it has borne a lot of the blame for ongoing labour shortages.

But Canada’s labour force participation rate is currently only slightly below where it was pre-pandemic. In fact, young and middle-aged Canadians have returned to the workforce at levels either close to or well above that observed in 2019, a Scotiabank report points out.

Concerned business groups have proposed a number of possible solutions to the looming demographic crisis, from boosting immigration levels to finding ways to retain older Canadians in the workforce for longer. (Some observers have even suggested the government should increase the age for Old Age Security, partly in order to discourage early retirement).