Long-range labour force projections in Canada: 2006 to 2031

Few babies; more retirees Canada's labour force will continue growing, but the overall participation rate will fall sharply, during the next quarter century in the wake of the nation's low fertility and the retirement of millions of baby boomers.

ABLE TO WORK VS. ACTUALLY WORKING Key Terms The labour force is defined as all individuals aged 15 years and older who work or who are looking for work. It is the pool of workers employed or available for employment in a population. The overall participation rate is the proportion of the population aged 15 years and older actively in the labour force. It provides an indication of the relative size of the supply of labour available for the production of goods and services. ABLE TO WORK VS. ACTUALLY WORKING

3 reasons for declining overall participation rate This decline in the overall participation rate(AKA actual workers) is mainly due to: the aging of the population, a result of low fertility over the last three decades and, the steady rise in life expectancy. The aging of the population will be exacerbated starting in 2011, when the first baby boomers will reach the age of 65.

Consequences of labour force changes The expected slowdown in labour force growth might have numerous consequences for the Canadian economy and society. What might be some consequences? Shortages: Not enough people to work! Demand for higher productivity

Different across Canada Only three provinces (Ontario, Alberta and British Columbia) will see a larger labour force in 2031 than in 2005. These are also the only provinces currently experiencing population growth near or above the Canadian average. In contrast, three of the Atlantic provinces (Newfoundland and Labrador, Nova Scotia and New Brunswick) along with Saskatchewan, would have a smaller labour force in 2031 than in 2005

In 2005, about 67% of the total population aged 15 and over was in the labour force. In the worst-case scenario, in which the participation rate stays at its recent level, it would fall to about 58% in 2031. The number of workers for every retired person aged 65 or older would be reduced by half between 2005 and 2031, falling from about four today to slightly more than two in 2031. In 1981, this ratio was more than five workers per inactive senior.

Bad news…irreversable These findings also suggest that neither a rise in fertility, nor increased immigration, nor even the continued rise in participation rates could reverse the downward trend. Again, the shift from working to retirement of the large baby boom generation and the proportionately fewer number of young adults (i.e. YOU!) largely explains this phenomenon. Boomers

And there’s more…Aging workforce There is another challenge on top of the inevitable drop in the overall participation rate of the Canadian population: the aging of the workforce. The proportion of the labour force 55 and older is expected to reach between 18% and 20% in 2021, about double what it was during the mid-1990s. In other words, about one worker in five (1/5) in 2021 will be aged 55 or older, compared to about one in seven (1/7) in 2005.

Challenges of having an aging workforce? It represents a major challenge for employers in terms of managing and renewing their labour force. The increased number of older workers could also affect labour productivity in the future.

What do you make of All this? Low fertility and the retirement of millions of baby boomers will cause decline in the participation rate of the labour force. This will have consequences for the Canadian economy and society, such as pressure on productivity and shortages in certain industries. The aging of the workforce will also present challenges, such as managing and renewing our labour force and labour productivity in the future.

The good news … Employment growth is expected to be fastest in service-producing industries More than two thirds (2/3) of all new jobs are expected to be in occupations usually requiring postsecondary education or in management The level of educational attainment of Canada's labour force will continue to rise The fastest labour force growth will take place in occupations usually requiring university education Retirements will account for a growing share of job openings Two thirds of all jobs openings will be in occupations usually requiring postsecondary education or in management

Table Category Occupations expected to face excess demand pressures over the next 10 years Business, finance and administration occupations Legislators and senior management (NOC 001) Human resources managers (NOC 0112) Human resources and business service professionals (NOC 112) Natural and applied sciences and related occupations Civil engineers (NOC 2131) Industrial engineering and manufacturing technologists and technicians (NOC 2233) Health occupations Managers in health, education, social and community services (NOC 031) Physicians, dentists and veterinarians (NOC 311) Physicians, dentists and veterinarians (NOC 311) Optometrists, chiropractors and other health diagnosing and treating professionals (NOC 312) Therapy and assessment professionals (NOC 314) Head nurses and supervisors (NOC 3151) Other technical occupations in health care (except dental) (NOC 323), such as registered nursing assistants, audiology technicians and physiotherapy technicians Medical radiation technologists (NOC 3215) Nurse aides and orderlies (NOC 3413) Other aides and assistants in support of health services (NOC 3414)

Occupations in social science, education, government service and religion Managers in public administration (NOC 041) Trades, transport and equipment operators and related occupations Residential home builders and renovators (NOC 0712) Facility operation and maintenance managers (NOC 0720) Contractors and supervisors, trades and related workers (NOC 721), such as in pipefitting trades and carpentry trades Occupations specific to the primary industry Supervisors, oil and gas drilling and service (NOC 8222) Oil and gas well drillers, servicers, testers and related workers (NOC 8232) Occupations specific to processing, manufacturing and utilities Supervisors, processing occupations (NOC 921), such as in petroleum, gas and chemical processing and utilities, and plastic and rubber products manufacturing

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