A new report from Statistics Canada, looking at what happens once the baby boomers retire, models six scenarios, including scenarios modelling different immigration levels, which show the downward trend in the overall labour force participation rate will likely continue until 2030 when the last cohort of baby boomers, born in 1965, reaches retirement age.  

“These departures have exerted a downward pressure on the labour force participation rate which reached its lowest level in 20 years in 2023, at 65 per cent,” Statistics Canada researchers state in their recent report, Canadian labour force: What will happen once baby boomers retire? “Despite the large number of baby boomers retiring, the labour force should (then) continue to grow over the next two decades in Canada, partly because of migratory increase.” (Immigration in Canada also reached record levels in 2022 and 2023.)  

Rising number of older workers 

They add that rising number of older workers will also have an impact on the size of the labour force in the coming years – the projections assume that the participation rate of workers over age 55 will be higher in 2041 than in 2023. 

The statisticians’ reference scenario, where 500,000 immigrants are admitted to the country annually, shows the labour force participation rate not stabilizing until 2030 when those boomers who are retiring, do so. The report then calls for the participation rate to stabilize at 64.6 per cent in 2041, a level comparable with that seen in 2023 when the participation rate was 65.2 per cent, the lowest level reported in two decades.   

“The scenarios for the different immigration levels show that the overall labour force participation rate would continue to decrease in the short term, regardless of the number of permanent immigrants welcomed each year,” they write.