How Demographic Pressures Could Shape Canada’s Labour Market in 2030

How Demographic Pressures Could Shape Canada’s Labour Market in 2030

COVID-19 has stalled immigration and forced women from their jobs. Meanwhile, people are retiring later, living longer and having fewer children. What might it mean for Canada's labour market?
February 10, 2021
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Canada’s population is getting older. There are now more seniors than children, and Canadian families are steadily having fewer children. New studies show that Baby Boomers would prefer to keep working than retire, which has the potential to put demographic pressure on Canada’s labour market. While Canada’s population growth is the highest among G7 countries, this is largely due to immigration, which has been significantly reduced due to COVID-19. However, to make up for reduced immigration during COVID-19, Canada has increased its immigration targets, although these may be challenged should the pandemic continue or anti-immigrant sentiments increase.

In our new report, Yesterday’s Gone: Exploring possible futures of Canada’s labour market in a post-COVID world, produced in partnership with the Future Skills Centre, we’ve identified 34 meso-trends that could impact the future work in Canada. This report uses futures research and expert workshops to explore a broad range of trends—many of which have been accelerated, disrupted, or created by COVID-19—that have the potential to impact Canada’s labour market over the coming decade. This report is not meant to be a comprehensive overview, a prediction of the future, or a deep analysis of any one trend. It’s meant to explore and consider the potential for different trends to interact in ways that are not always obvious, as well as how these trends may impact populations and demographic groups differently. Here, we explore meso-trends related to our evolving population that could shape Canada’s labour market in the decade ahead.

1. Working Retirement

There are a record of 10,000 centenarians in Canada—10,795 people older than 100. By 2030, it is projected that one in four Canadians will be seniors. At the same time, many people in this demographic are not prepared for retirement. According to a McKinsey Global Institute report, 41% of individuals in advanced economies did not save for retirement. This population is also seeking loans to cover their costs, with new mortgages rising by 63% among Canadians aged 73–93. At the same time, many Gen Z-ers and millennials are unlikely to save for retirement given the impending climate collapse. According to a forecast in Benefits Canada, defined benefit pensions in the private sector will eventually die. There is a shift underway that may mean people work well into their 80s and 90s to support their financial needs. In the near term, this may be true for existing seniors who haven’t prepared to financially retire. In the longer term, this may also mean an overall change in the approach to work, where individuals focus on well-being and meaning throughout their long careers.

However… according to Statistics Canada, in 2019, the average retirement age in Canada was 64.3 years. 

In 2030 this could mean:

  • The increased flexibility of work and opportunities for gig work, as well as lack of savings, may mean that workers choose not to retire for a long period of time.
  • Talent retention may become more difficult in a longer working life.
  • There might be a need for more accessible working facilities to accommodate older employees.

Labour market implications:

  • There may be increased demand for publicly funded healthcare services to support an aging working population.
  • There may be increased demand for reskilling opportunities as workers retire from one career and move on to another career.
  • Employers may need to accommodate workers spanning multiple generations and tailor incentives and compensation accordingly.

Signal Maturity: Mature

2. Free Childcare

A 2019 Canadian Centre for Policy Alternatives study found that the average cost of preschool-age child care was $1,207 per month in Toronto,  $954 in Vancouver, $861 in Halifax, and $179 in Quebec City. Some women report that paying for childcare feels like paying to get to work. Recently, the British Columbia Green Party proposed free childcare for children under age three and free early-childhood education for children under age four, while in 2018, the Ontario Liberal Party proposed free childcare for children aged two to four. As Canada grapples with the long-term impacts of Covid-19 on women’s employment participation, and declining birth rates, free childcare might become a popular solution. In fact, in April 2020, Australia made childcare free for families for three months in efforts to reduce financial stress created by Covid-19, and in the September 2020 Throne Speech, Prime Minister Trudeau promised a national childcare and early education system

However… concerns over government spending are already high, and free childcare would be a new multi-billion-dollar annual expense. 

In 2030 this could mean:

  • There may be an increase in economic mobility for lower-income families
  • Gender parity may improve, with an increase of women in leadership positions.
  • There could be an overall increase in household incomes, and an increase in disposable income for families with young children.
  • There might be a decline in the duration of parental leaves taken by new parents

Potential labour market implications:

  • A national childcare program could mean a significant increase in demand for workers in childcare, early childhood education, daycare administration, and daycare certification. 
  • Should adoption be variable across Canada, regional competitiveness may increase for areas that do implement. 

3. Birth Strikers

In 2018, Blythe Pepino founded the climate change activism group, BirthStrike, and has built a group of 450 followers, who pledge to not to have children because of fears related to climate change—droughts, famine, flooding and extreme heat. Teenagers in Canada are following suit and have signed up for the Climate Strike Canada’s “No Future, No Children” campaign. At the same time, there is a global decline in birth rates, where 23 countries are expected to see their populations halve by 2100. Japan is responding to this trend by funding AI-based matchmaking services in order to boost the falling birth rate in the country. In Canada, the fertility rate has been decreasing over time. Statistics Canada announced that in 2019, the total fertility rate in Canada hit a record low of 1.47 births per woman. People choosing not to have children have the potential to significantly change the population in Canada over time. 

However… the Century Initiative is focused on responsibly growing the population of Canada, through immigration, to 100 million by 2100.

In 2030 this could mean:

  • There may be increased societal pressure for couples to be childless. 
  • Family structures, relationships, and marriage rates may evolve. 
  • New policies may emerge to encourage families to have multiple children.
  • An aging population could have many impacts, including more government spending on healthcare and pensions.

Potential labour market implications:

  • Greater women’s participation in the workforce may completely abolish the current negative impacts for women’s careers and career progression
  • There may be a push to attract international students and younger workers to Canada.

Signal Maturity: Weak

4. Digital Residents

In December 2014, Estonia launched a digital residency program designed to attract global entrepreneurs to use their government e-services. With over 50,000 e-residents from 157 countries, Estonia has allowed 6,000 businesses to incorporate, and have a European bank account, conduct business in the European Union, yet be located anywhere in the world. The Estonian e-residency is a popular option for Brits escaping Brexit and Americans escaping Trump. Understanding the economic benefit, Azerbaijan has followed suit, and Lithuania plans to launch a similar program in January 2021. With the acceleration of remote work, it is possible that borderless work may become more common in the future.

However… deglobalization and a push to support local businesses may prevent more countries from adopting this type of program. 

In 2030 this could mean:

  • Everyone may have digital IDs that are used across platforms and services.
  • The concept of citizenship may evolve and no longer be tied to geographic place.
  • Intercultural, diversity, and inclusion training may be mandatory for all workers as it becomes common to be working on multinational teams.
  • The United Nations’ International Labour Organization may become more important to support global workers’ rights.
  • There may be a growth of international accreditation and globally recognized certificate programs to reduce cross-border credentialization challenges.
  • There may be increased employer surveillance technology to monitor global teams.

Potential labour market implications:

  • There may be significant growth in the digital economy, while analog businesses may become less competitive.
  • Canadian employee wages may be compressed if competing with global talent, potentially resulting in a call for a global minimum wage.
  • Income tax policies may need to be updated to reflect shifts in global employment trends.

Signal Maturity: Weak

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For media enquiries, please contact Lianne George, Director of Strategic Communications at the Brookfield Institute for Innovation + Entrepreneurship.

February 10, 2021
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