There’s lot of kick in our aging population, and Canada needs to make use of its talent.
By Joan Cohen
Think of it this way. We are, as a society, on a curve in the road. A new economic landscape is starting to open up outside the windows of our vehicle – familiar shapes and structures still lurk there while new and challenging forms and possibilities are coming into view.
Much is still obscured by the continuing curvature of the road and is for now unknowable, yet we might usefully listen to the themes that are beginning to assert themselves. Two which have been prominent in recent day are our aging population and its work habits, and the very pressing need for Canadian industry to become more innovative and productive.
We in Canada are living longer. As Bank of Canada deputy governor Jean Boivin reminded us the other day, Canadians born in 2000 can expect to live three decades longer than those born in 1900. This aging population is swelling the ranks of non-workers so that there is a lower proportion of productive people in the economy. The changing ratios result in lower incomes and are lowering the expectations of Canadians. Boivin says it’s an open question as to how well society will adjust to the age changes that are occurring.
There is, however, a whole other side to this equation. Peter Hicks, associate research director at the C.D.Howe institute, points out that recent trends indicate people are likely to stay in the workforce about five years longer than previously. The proportion of older workers in the workforce has been climbing since the mid-1990s, Hicks says, and workforce projections suggest continuing strong demand for their labour.
This development coincides with the education creep that has been a striking phenomenon of the workplace. It began with the early batch of baby boomers who first joined the labour force around the mid-seventies. This group was much better educated than the workers who preceded them and the effect, as they moved through the workforce, was that succeeding generations of workers were found to be ever more experienced and skilled.
The 2006 census found that among people age 45 to 54, 84 per cent had some form of degree or certificate, Hicks reports. Yet in the 65 to 74 age group that same year, only 68 per cent had a certificate. In the same vein, literacy surveys have uncovered a large jump in reading comprehension between those approaching retirement age in 2001 and the young workers who won’t retire until 2031.
“In the future labour force,” Hicks promises, “there will not be [a] large education and skills gap between younger and older workers.” When the boomers arrived in the schools and the workplace, completion of high school and beyond became the norm, the nature of work rapidly evolved and the knowledge economy spread, while gender equality in the education system markedly improved.
Our population, including the older generations, appears better equipped to participate in tomorrow’s global economy than we might have been led to believe. And, as we’ve been told, Canada must compete in that economy if we’re to sustain an acceptable standard of living.
In the sharp, explicit words of Bank of Carney governor Mark Carney, Canada cannot rely on domestic demand and household spending to sustain its economy. What is needed now is greater focus on global opportunities.
Canada’s share of world exports has been declining since the turn of the millennium. Canada’s export growth has been on average almost five percentage points slower than global export growth each year, and our share of the global export markets has tumbled from about 4.5 per cent to 2.5 per cent. As the bank governor has been warning, the most significant drag on our performance is the concentration of our exports in slow-growing advanced economies, like the United States, rather than fast-growing emerging markets. It is to these growing markets like India and China that Canada must increasingly look for export growth.
How? Our businesses need to refocus, retool and retrain., says Mark Carney. We need to refocus by capturing more of the value-added when we produce commodities like energy and foods. (What country is better positioned than ours to do so?).
We need to retool by investing in plant, equipment and information and communications technology, and in developing new manufacturing processes; and meanwhile we need to be learning how to better use labour and capital, how to be more efficient, how to better manage our resources, and more. Critical to our success, we need to take our innovative ideas and turn them into commercial successes, something else we are bad at today.
We need to retrain – by investing in our people, our great resource.
Two themes emerge as critical: how we exploit and employ an educated labour force and notably the often undervalued capability of our aging population, and how we explore and exploit the opportunities of the enormous, growing markets abroad.
Both rich resource opportunities are waiting to be harnessed. Much of Canada’s story for the next 20 years will revolve around our success.