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A Grey Tsunami: Canada’s great retirement wave

The pandemic labour market phenomenon in the U.S. might be the “great resignation” as people quit their jobs in droves. In Canada, it’s more like the “great retirement” as the Boomers make their exit from the workforce.

September 30, 2022

4-minute read

Recent attention in the Labour Force Survey has examined an unusual rise in retirements in Canada’s workforce. In the August data alone 73,000 more people than usual retired from their job—32% more retirements than August 2021.

We haven’t had a great resignation in Canada, like they have in the U.S.—it’s more like a great retirement wave as Baby Boomers hit the exit door.

This analysis* looks beyond the headlines to determine what’s driving the current wave of retirements and potential implications. It turns out that the excess retirements started just this year, the trend is almost entirely in Ontario, and it doesn’t bode well for health care and education as we head into the fall.

Pandemic fatigue? Frontline workers are retiring in droves

We know that 73,000 more people than usual had retired by August 2022 compared to the previous August, but what jobs are they retiring from? Out of 21 industries, four are driving this trend, representing roughly two-thirds of excess retirements in 2022. They are health care, construction, retail trade, and education/social assistance.

This great retirement wave didn’t start in August; it actually started much earlier in the year and gained steam over the course of 2022.

The initial months of retirements were actually a story about health care workers. By April 2022, Canada had registered 19,000 excess retirements in the health care field compared to a year before. In fact, the number of retirees almost doubled, surging from 28,000 in April 2021 to 47,000 by April 2022. This rash of excess spring retirements in health care tapered off by the summer.

Excess retirements in retail trade hit their peak in June 2022, with 13,000 more workers than usual moving into their golden years.

Construction racked up an additional 18,000 retirements over and above July 2021, the highest point so far.

An additional 21,000 education and social assistance workers moved into retirement in 2022 compared to 2021: 29,000 in August 2021 compared to 51,000 in August 2022.

It's worth noting that the industries that are driving Canada’s great retirement offer jobs that you can’t do from home. Education and health care workers, in particular, have been on the frontlines of the pandemic, putting themselves in harm's way to deliver critical public services since 2020. Retirements of the most experienced workers in these industries are playing a role in employers’ difficulties finding skilled workers in these areas.

The great retirement: Yours to discover…it’s all about Ontario

If we look at the retirement data regionally, the retirement wave is mostly about Ontario workers and has been for all of this year. Excess retirements in Quebec also make up part of the picture, but that’s largely due Quebec being our second biggest province.

Of the 73,000 excess retirements in August, 48,000 of them were in Ontario. In other words, 66% of excess retirements were in Ontario, but Ontario workers only make up 39% of Canada’s employed population.

Teacher retirements in Ontario drove the retirement trend in August 2022, with 13,000 excess education retirements over last year: retirements surged from 8,000 in August 2021 to 21,000 in August 2022. Therefore, of the Canada wide excess retirements in education in August, 62% occurred in Ontario.

Retiring younger than ever

The other peculiar feature of Canada’s great retirement wave is that a surprising number of relatively younger workers (55-59) are choosing the exit door.

In August 2021, 38% of workers were between the ages of 65 and 69—they were the largest age group to retire. However, by August 2022, that typical retirement group declined by five percentage points, to only 33% of retiring workers.

The next retirement group, workers aged 60 to 64, made up 28% of retirements in 2021 but by August 2022, retirements in that age bracket went up to 31%.

Retirements among workers aged 55 to 59 also gained three points, rising from 16% of retirees in August 2021 to 19% of retirees by August 2022.

These excess retirements are being driven by those who haven’t yet reached 65, which has typically been a more standard retirement age in Canada. Therefore, it wasn’t age driving these retirements, per se.

Generally, workers have been working much later in life than in previous decades. The 2022 great retirement wave is reversing that trend in key industries where there are labour shortages.

The surge in younger retirees hints at other reasons for retirement—like burnout or frustration with provincial government policies that make good jobs, such as teaching and nursing, impossible jobs. Although the data doesn’t capture this bigger picture particularly well.

Is public policy responsible for the great retirement wave?

The increase in Ontario retirements paints a disconcerting picture for key public services, such as health care and education. Burnout and/or changing workplace environments are clearly having an impact on the most experienced workers in these industries. While they may have stuck it out during the pandemic out of a sense of duty, there is a limit as to how much can be expected of workers in highly stressful jobs.

In education, school board funding dropped by $800 per student between the 2017-18 and 2021-22 school years, which means education workers have to deal with the consequences of the pandemic with fewer resources than they had before it, which is a lot to ask from these workers.

In health care, there hasn’t been a break for two+ years, with dual pressures of the pandemic and surgery backlogs.

For workers who are close to retirement, the economic re-opening in 2022 may have been an indication that work in these critical industries isn’t going to go back to the way it was before COVID-19 rocked our world. Retirement may be the answer.

The concentration of retirees in Ontario is happening amid the backdrop of Bill 124, which limits public sector pay increases to 1%, well below inflation which is presently at 7.0%.

The Canada Pension Plan, teachers’ and nurses’ pensions, as well as federal seniors’ supports are indexed to inflation, whereas wages in these sectors are not. Deteriorating real wages as a result of these types of wage restrictions can only hurt both retention of experienced workers at retirement age as well as recruitment of new workers to backfill in specialized roles in operating rooms and emergency rooms in the province.


*A quick point on methodology: the retirement statistics are the count of people who retired in the past 12 months, not just in that particular month. “Excess” retirements are the difference between this year’s retirement figure vs last year’s. The data below are derived from the Labour Force Survey Public Use Microdata File.

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