Participation rate in 2031 expected to be lowest since 1970s
The rate of growth in the labour force is expected to slow down over the next 20 years, primarily because of the retirement of baby boomers, according to Statistics Canada.
While growth in the 1970s, when the baby boomers were entering the workforce, was about four per cent per year, growth is projected to be less than one per cent by 2016.
Projections show it could slow even further to between 0.2 per cent and 0.7 per cent in the period from 2021 to 2026, according to Statistics Canada.
The overall participation rate — the percentage of the total population aged 15 and over that is in the labour force — is also projected to decline. In 2010, the participation rate was 67 per cent, but by 2031, it is projected to range between 59.7 per cent and 62.6 per cent, which would be the lowest observed since the late 1970s, said Statistics Canada.
The declining participation rate is due to demographic phenomena, such as the aging of the baby boomers, increasing life expectancy and a slower birth rate.
The projections also suggest that, if recent trends continue, the labour force will become older with close to one person out of four in the labour force aged 55 or over by 2021.
There would also be higher proportions of foreign-born people and visible minorities in the labour force, said Statistics Canada. By 2031, roughly one in every three people in the labour force could be foreign born.
Between 1991 and 2006, the percentage of foreign-born people in the labour force rose from 18.5 per cent to 21.2 per cent. If recent immigration levels continue, that proportion is projected to reach almost 33 per cent in 2031, according to Statistics Canada.
