Canada’s labor force grew in August, but it fell the previous two months and remains smaller than before the summer as tens of thousands of people simply stopped working. Much of this can be chalked up to more Canadians than ever retiring, said Statistics Canada.
“We knew from a long time ago that this wave was coming, that we would get into this moment,” said Jimmy Jean, chief economist at Desjardins Group. “And it’s only going to intensify in the coming years.” Their departures are shrinking the labor force, which could weigh on economic growth at a time when the central bank is aggressively hiking interest rates to counter spiking inflation, fanning fears that the economy will fall into recession.
Adding to the problem, more than 620,000 Canadians entered the 65+ age category during the pandemic, a 9.7% increase in that population group. Despite three straight months of job losses, job vacancies and postings remain well above pre-pandemic levels.The retirement problem is particularly dire in skilled fields like trades and nursing. Since May, Canada has lost 34,400 jobs in healthcare even as a record number of nurses reported working overtime hours.
The transportation industry is also grappling with a severe worker shortage, both because of the pandemic-driven frenzy for more goods and as the workforce ages.