It’s not surprising to anyone that the way Canadians live their lives has changed in the past few decades. We no longer leave school to get married and settle down with a family. More often than not, people now want to stay in school longer before graduating, then get a job and become successful in their careers. Only after that has happened will they then decide that it’s time to settle down, buy a home, pay a mortgage, and start a family. This shift is certainly making an impact on Canada’s economy in several different ways.But there’s one major way that’s becoming more apparent by the day – more Baby Boomers are starting to work past retirement age.
These findings come from the Institut de la Statistique de Quebec, who have recently released a report showing the number of retirees in the past 10 years has more than doubled in Canada’s two largest provinces, Ontario and Quebec. The report showed that in 2000, the number of retirees in both provinces combined was 117,000. However, in 2010, that number had more than doubled to 294,000. In Ontario, the employment rate for those aged 65 and older was 9%; and in Quebec it was even more than that at 13%.
The reasons for more Boomers working past the age of 65 are not known completely. Some Boomers choose to work past retirement simply because they still can – and they still want to! But much of it comes from that very shift of leaving school and starting our own lives later. Where people once graduated from college in their early twenties, it’s now in their thirties,or even later for some.
This means that Boomers today started working at a later age, and have had less time to save for their retirement than the generations before them. And because of that, they now have to work longer and later in life – even if that means working past their retirement years.
So what does all of this mean for Canada’s economic outlook? After all, everyone in the country has been so busy worrying that these Boomers are going to be extremely taxing when they stop working and start taking from CPP. So, is the fact that they are going to be working promising for Canada’s economy? Not really, says Kevin Page, Canada’s Parliamentary Budget Officer. The number of Boomers that will still retire at the age of 65 is still going to be extremely large, and there will still be far fewer people working and paying taxes on income.
That, he says, is going to cause a national fiscal structure that is “not sustainable” if productivity levels remain where they are. Page looks at the past three decades to prove his point. In the past, the country has seen a 2.6% average annual expansion. But if those productivity levels don’t rise up, and whether or not Boomers retire at the age of 65, that outlook would drop to a shocking 1.8%.
