Meeting Canada's Demographic Challenges
This is the third feature in a series highlighting CPJ’s recommendations for the 2013 federal budget in Promoting the Common Good. Last week we focused on the need for government action to encourage the creation of high-quality jobs. This week we turn to the measures we believe should be implemented to help the country address the challenges associated with Canada’s aging population and possible skills shortages.
Canadians are getting older. Between a below-average birth replacement rate, increases in life expectancy, and aging baby boomers, seniors will be the fastest-growing age group for the next several decades. By 2051, about one in four Canadians will be over 65.1
There are clear policy implications: more people will be retiring and in need of seniors’ benefits, and as these people leave the paid workforce, an emerging skills shortage in key economic sectors.
Something needs to be done to ensure seniors receive the benefits they need to live in dignity and to make sure our economy can provide those benefits and support the well-being of all Canadians.
Provide support for low-income seniors
To partially address these challenges, the federal government has announced reforms to Old Age Security (OAS), Canada’s key income security program for seniors. Claiming the program is unsustainable, Ottawa has announced that the age of eligibility for OAS will be increased from 65 to 67 beginning in 2023. The rationale is that this change will both encourage people to stay in the workforce longer and reduce the expected strain that retiring baby boomers will place on the system.
There are all sorts of problems with this proposal. The forecasted OAS cost increase isn’t as dire as some make it out to be2, and the changes will impact those who can afford it least: namely, low-income seniors (for more details, check out some of our earlier commentary).
Thankfully there are better ways to address Canada’s demographic challenges than forcing seniors to work longer.
Create a more open, inclusive immigration system
Canada has a long history of opening its borders to newcomers wanting to forge a better life for their families. Immigrants have literally built our nation, bringing with them all sorts of skills, knowledge, and expertise, and becoming part of the country in every way.
In recent years, however, Canada has become increasingly reliant on a new “sub-class” of labour to meet skills shortages: temporary foreign workers (TFWs). As of December 1, 2011, there were 300,000 TFWs in Canada, more than double the number in 2006.3 TFWs help fill the skills gap (particularly for low-skilled workers), yet they are often paid less than industry average wages, have precarious status in Canada with few opportunities for permanent residency, and are highly vulnerable to their employers.
As one temporary agricultural worker from Mexico comments, “as long as the patron (boss) keeps inviting me, I have work in Canada. If for any reason he doesn’t ask me, I can’t get into Canada. I obey the person who pays me.”4
Canada could instead take a stand for justice and help meet long-term labour needs by making it easier for TFWs to become permanent residents, with the same rights and protections as other workers. One way to do this would be to increase the quotas the federal government sets for the number of people provinces can nominate to fast-track citizenship.
The federal government could also make the foreign qualification recognition (FQR) process more efficient and understandable. The House’s Standing Committee on Human Resources has stated this is key to meeting skills shortages in Canada.
Support young people in entering the workforce
Another way to meet the needs resulting from Canada’s aging population is to support opportunities for young people to enter the job market. Youth accounted for more than half of all net job losses during the recession. They are now competing with older, more experienced workers looking to reenter the labour force who lost their jobs in the recession’s wake.
Many young people are wisely choosing to go to school to develop skills for the workplace, but high levels of debt can discourage them from moving ahead in their education and training programs. While the federal government has made substantial investments in promoting and supporting trades and apprenticeships, more could be done to help ease student debt loads. By investing in students, the federal government has the opportunity to cultivate a highly-skilled workforce to help meet the long-term needs of our economy.
Promoting the Common Good
Ensuring the well-being of low-income seniors, promoting a just and inclusive immigration policy to meet skills shortages, and assisting young people in developing their God-given gifts and abilities are all public justice issues. As Canada prepares for the challenges resulting from our changing demographic, the federal government has an opportunity to help build a sustainable economy and promote the common good.
In summary, we believe the federal government should adopt the following measures:
- Reverse the decision to increase the eligibility age for OAS/GIS in order to help keep vulnerable seniors out of poverty.
- Increase provincial quotas to fast-track citizenship for Canada’s Temporary Foreign Workers (TFWs).
- Improve the foreign qualification recognition (FQR) process.
- Increase assistance for post-secondary education, apprenticeships, and federally-funded summer job and internship programs.
Check back in the next few weeks for details on our other recommendations!
- 1. Canadians in Context - Aging Population. Human Resources and Skills Development Canada. http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=33
- 2. While the total cost of OAS/GIS is forecasted to rise from $38 billion in 2011 to $108 billion by 2030, when taken as a percentage of total GDP, this is an increase from 2.36% in 2011 to a modest peak of 3.14% in 2030. An increase to be sure, but one that we believe Canada can well afford. For more information see: Old Age Security Program 10th Actuarial Report. Office of the Chief Actuary. OSFI. 2011.
- 3. Citizenship and Immigration Canada. http://www.cic.gc.ca/english/resources/statistics/facts2011-summary/04.a...
- 4. For more information on migrant workers in Canada, check out some of the work of York University’s Deborah Barndt, including Tangled Routes: Women, Work and Globalization on the Tomato Trail (http://www.yorku.ca/fes/community/news/archive/259.htm), and the efforts of advocacy organizations such as Justicia for Migrant Workers (http://www.justicia4migrantworkers.org)
Simon is CPJ's Socio-Economic Policy Analyst
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