A Combination of Immigration and Extending the Retirement Age Can Help Strengthen Canada's Future
According to a recent article from The Globe and Mail, immigration is not the sole solution to help Canada’s economy and ageing population.
Canada’s population is ageing. Baby Boomers, Canada’s largest generation, are nearing or are already at retirement age. And Canadian women are not having as many children as they once were.
Canada’s fertility rates have not met the replacement rate of 2.1 needed for stable population growth since 1971. In addition, the life expectancy for Canadians has also increased by more than nine years. In short, Canadians are living longer and having fewer children and less frequently.
Without a young population to replace retiring workers, there will be fewer working-age Canadians contributing to the workforce and economy. This imbalance puts pressure on the standards of living, slows economic growth, and creates numerous fiscal challenges.
Health care and public pensions are a particular area of concern. As Canadians age and retire, they rely more on health care and public pension funds. A labour shortage means there won’t be enough health care workers to take care of an ageing population. Meanwhile, with fewer workers contributing to pensions or the tax base.
Without immigration, these issues would necessitate an increase in taxes. Thankfully, Canada’s internal population growth has been supplemented for years with immigration.
Immigration brings in young families and working-age newcomers. These newcomers fill workplace shortages and contribute positively to the economy. Unfortunately, immigration alone is not the solution to Canada’s ageing and retiring population.
For Canada to replace the number of retirees leaving the workforce over the next 40 years, the country would have to bring in a hypothetical 1.5 million immigrants annually. Currently, about one-third of that amount are admitted each year.
Thankfully, more Canadians are choosing to delay retirement. Employee and employer attitudes towards retirement are also shifting to support changing dynamics and structures. This leaves more Canadians in the working-age population and creates a healthier balance for the economy. A lower ratio of retirees to workers means less pressure on health care systems and better living standards.
If Canada encourages later retirement and realistically increases immigration numbers gradually over time, there will be a better balance, especially as more Canadians leave the workforce.
By the time most Canadians have retired, there will hopefully be enough working-age Canadians with the help of immigration to keep the economy going strong.
For more information on economic immigration programs, contact an immigration lawyer in Canada.