Canada Faces Largest Retirement Wave: 2.7 Million Boomers to Exit Workforce — Can Economy Cope?

Recent reporting, notably from Global News and RBC’s thought leadership, highlights a looming demographic shift in Canada: over the next five years, the final, and largest, wave of baby boomers will be turning 65 and exiting the labour force. RBC estimates that some 2.7 million individuals currently aged 60–64 may retire in the coming years.

So far, about 5.2 million boomers have already retired over the past decade, contributing to structural tightening in Canada’s labour market. RBC warns that even as unemployment hovers, the real pressure lies ahead: a wave of retirees combined with slowing immigration will squeeze labour supply further.

Supporting Data & Trends

• Statistics Canada reports that as of July 1, 2023, approximately 7.6 million Canadians (18.9% of population) were aged 65 or older. That share is projected to rise to between 21.4% and 23.4% by 2030.

• In a demographic projection, regardless of immigration levels, Canada’s labour force participation rate is expected to decline until the 2030s, potentially stabilizing around 65%.

• The Labour Market Information Council (LMIC) notes that since 2000, the share of workers aged 55+ has surged — from 1 in 9.5 to 1 in 4.6 in 2023 — intensifying retirement risk across sectors.

• Fraser Institute research indicates that a 10% increase in the share of population aged 65+ is associated with a 0.23 percentage point drop in growth rate of real GDP per capita. Under aggressive aging scenarios, Canada’s per-capita GDP in 2043 could be ~13% lower than in a no-aging scenario.

• On health expenditures, the Fraser Institute also projects that aging will force large increases in healthcare spending: per-capita costs for seniors are several times higher than for younger age groups, and between 2019 to 2040, health care for 65+ categories could grow by ~88%.

• TD Economics likewise warns that aging will stretch firms’ ability to maintain workforce levels, and even robust immigration and participation efforts may not fully offset the trend.

• RBC contends that the labour force participation rate has already declined by 1.6 percentage points between 2010 and 2024, despite rising participation among prime-age workers. They project another 2-point drop by 2030 under moderate immigration scenarios.