‘It is your new normal’: Canada’s aging workforce root of national labour shortage

CALGARY –

When Dan Gallagher appears to be like round his firm, he sees plenty of retirement events in his future.

While it isn’t one thing he formally tracks, the CEO of Mikisew Group — a Fort McMurray, Alta.-based firm that makes a speciality of oilsands website providers, upkeep, logistics and development — is aware of he is obtained extra workers approaching the tip of their careers than simply beginning 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 stated.

The implications of that make him nervous.

Mikisew Group is already combating a scarcity of labour, even recruiting as distant as Australia simply to maintain its fleet of heavy tools transferring. And primary demographics recommend the corporate’s downside is ready to worsen, not higher.

“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.

For years, specialists have been warning of a looming wave of retirements as child boomers — these born between 1946 and 1964 and Canada’s largest technology by dimension — get older and begin to exit the workforce en masse.

This nation’s labour pressure development fee has been trending downward since 2000, however the development has intensified in recent times. This “grey wave” has been on the horizon for some time, however specialists say it is now crashing ashore.

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

Last yr alone, one in 5 Canadians of working age have been aged 55 to 64 — an all-time excessive within the historical past 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,” stated Mike Holden, chief economist for the Business Council of Alberta.

The arrival of the gray wave is happening on the similar time that companies of each dimension, in each business, and in each province are complaining of labour shortages. As of the second quarter of 2022, there have been greater than 1,000,000 vacant jobs in Canada — the very best quarterly quantity on report.

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

But Canada’s labour pressure participation fee is at present solely barely under the place it was pre-pandemic. In reality, younger and middle-aged Canadians have returned to the workforce at ranges both near or properly above that noticed in 2019, a Scotiabank report factors out.

The similar report says the decline in total workforce participation that does exist is solely because of Canadians aged 60 and above exiting the workforce. That means the actual root of the present downside is Canada’s growing older inhabitants, and it has broad implications for the nation’s economic system.

“I think the most important thing that gets overlooked is, what are the consequences of these labour challenges?” says Patrick Gill, senior director with the Canadian Chamber of Commerce’s business knowledge lab.

He factors out that round one in three Canadian companies (36 per cent) already report they’re at present going through a scarcity of labour. That determine climbs to about 45 per cent inside the manufacturing and development industries and 58 per cent within the meals and lodging sector.

“It translates to everyone working more hours, and that ultimately affects quality of life. It means slower growth, and it’s also a factor in supply chain delays.”

Concerned business teams have proposed a lot of potential options to the looming demographic disaster, from boosting immigration ranges to discovering methods to retain older Canadians within the workforce for longer. (Some observers have even recommended the federal government ought to improve the age for Old Age Security, partly to be able to discourage early retirement).

But even a big improve in immigration will not be sufficient to halt the approaching tide, says Rafael Gomez, director of the University of Toronto’s Centre for Industrial Relations and Human Resources.

The final of Canada’s child growth technology will flip 65 in 2030, and as soon as this cohort is out of the workforce solely, the working age inhabitants — these aged 15 to 64 — will make up a smaller proportion of the general Canadian inhabitants.

“This was always going to bite us,” Gomez says. “Demographic trends are not easy to shift in a short-term way. In fact, it’s true that for 20 years we’re going to see a decline (in the labour force).”

While governments ought to make use of each coverage lever at their disposal to handle labour shortages, Gomez says, employers additionally want to just accept the truth that the challenges they’re having proper now filling vacancies will not be going to go away.

“It is your new normal. And even if the economy goes in the tank, it’s not going to change the labour conditions,” he says.

“We are entering a time where we are going to have a younger workforce — doing more, being asked to do more, being bidded for and competed for,” Gomez provides.

“Labour is going to be very difficult to find and employers are going to have to work hard to attract employees.”

This report by The Canadian Press was first revealed Dec. 11, 2022.