Canada’s labour force continues to grow but retiring baby boomers will slow the rate of growth to a crawl over the next 20 years, Statistics Canada says.
The agency estimates there could be as many as 22.5 million people working by 2031, up from 18.5 million last year.
However, it projects that the rate of growth will slow to between 0.2 per cent and 0.7 per cent a year from 2021 to 2026. When the boomers were entering the job market in the 1970s, the labour force increased at an average rate of just over four per cent a year.
In 1981, there were roughly six people working for each retiree. By 2031, the ratio will be three to one, Statistics Canada forecasts. By that time, the entire baby-boom generation will have reached the age of 65.
The agency also projects that the participation rate in the labour force by 2031 could be as low as it was in the 1970s, with less than 63 per cent of Canadians over the age of 15 at work.
“The projected decline in the overall participation rate over the next two decades would be largely attributable to demographic phenomena, such as the aging of the baby boom cohorts, increasing life expectancy and a fertility rate below the replacement level of 2.1 children per woman,” StatsCan said in a release.
The labour-force projections are based on five scenarios that combine assumptions on future population growth with assumptions on future labour-force participation rates.