Discussion about retirement age resurfaces as census shows big rise in senior population

From 2011-16, as the first baby boomers turned 65, Canada saw its senior population increase by 20 per cent, newly released census data from Statistics Canada shows.

The growth was much faster than that of the overall population, which increased by five per cent.

“Many aspects of Canadian society are being shaped by the fact that the first baby boomers turned 65 in 2011 and many of them have now left the labour market,” Statistics Canada noted in its latest report on data from the 2016 census. “More Canadians are receiving an old-age pension and are seeking more health care and services. Meanwhile, proportionately fewer people are working and paying income tax.”

While the number of seniors grew quickly, the population of youth aged 14 and younger rose more slowly by 4.1 per cent over the period. As fertility rates remain low and life expectancies increase, Statistics Canada predicts the population will continue to age quickly until 2031.

Read: Employers challenged by trend towards delayed retirement 

The report also noted the proportion of working age Canadians — those aged 15 to 64 — dropped two percentage points, to 66.5 per cent from 68.5 per cent in the five years between 2011 and 2016.

Yves Carrière, an adjunct professor of demography at the University of Montreal, notes the numbers aren’t surprising. “The consequences of the numbers that came out today, they’re no different than the consequences of what we were seeing coming for the past 10, 20, 30 years,” he says, noting the trend has a bigger impact on old-age security payments than the Canada Pension Plan.

The CPP contribution rate of 9.9 per cent “provides us with some equilibrium in the system in the long run, considering aging of the population,” Carrière says. Unless life expectancy at age 80 increases much more quickly than expected, contribution rates can remain steady without having to reduce benefits or increase the eligibility age, he notes.

Read: Canada’s retirement system receives B grade from global pension index

The new data, however, “does bring back some discussions that have been happening in the last few years about normal retirement age,” he says.

Proponents for raising the retirement age argue doing so would encourage Canadians to retire later and would save the government money. But Carrière notes Canadians are already retiring later and suggests raising the age of retirement wouldn’t help laid-off workers or those who have to leave the workforce for health reasons.

“They might collect social assistance for longer or they might collect money from some health plan,” he says. “So what you save from one pocket, you might have to pay from another pocket for these individuals, those that are stuck with having to retire early for involuntary reasons.”

Read: Canada should raise eligibility age for public pension benefits: report

But Louise Plouffe, director of research with the International Longevity Centre Canada at the University of Ottawa, told The Canadian Press governments need to find ways to help older workers stay in the workforce for as long as they need. “It’s novel in human history. Older people are healthier than they have been in the past and represent a tremendous resource,” she said.

“Policies have to be adapted to help people remain healthy, active and independent as long as possible.”