Canada is seeing its largest retirement wave as fertility rate plummets

A silver tsunami is headed for Canada with all baby boomers set to hit retirement age by 2030, with far-reaching implications for Canada’s economy and labour market, a new RBC report says.

The RBC report comes as Statistics Canada said in a separate report Wednesday that Canada’s fertility rate reached record lows in 2024.

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The boomer retirement wave, which started in 2011 when the oldest boomers turned 65, will reach its peak by the end of this decade, the Royal Bank of Canada report said.

By 2024, two-thirds of all boomers had reached retirement age.

“Remaining boomers will reach age 65 by 2030, bringing the largest retirement wave yet,” RBC economist Cynthia Leach said in the report.

While in the short term, Canada is seeing high unemployment amid the trade war with the United States, the RBC report said the unemployment rate could be peaking soon.

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“A structural reduction in labour supply will be felt more acutely across the economy. It means that despite current labour market weakness, Canada must prepare for tomorrow’s tighter market,” Leach said in the report.

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The high levels of migration Canada saw in the last decade will not be enough to offset the gaps in the labour market, the report added. This is because of the “federal government’s current in-migration policy reversal.”

“Near-zero population growth is expected in 2026 and 2027 under new and drastically lower targets. Annual average growth between 2020 and 2027 would be barely above the 2010-2019 average,” the report said.

RBC is predicting a two per cent decrease in labour force participation between 2024 and 2030. This would exceed the drop of the last 14 years, “meaning Canada will face the peak impact of boomers on the labour force.”

After the current cycle of unemployment winds down, Canada’s untapped domestic labour pool will be depleted, the report warns.

“Continued declines in the participation rate are in the cards even if population growth overshoots the federal target,” the report said.

The report said that while people over 55 make up 21 per cent of Canada’s workforce across industries, some sectors will be hurt more than others when boomers retire.

Some sectors have already experienced close to a doubling, or more, in annual retirement churn, it added.

“This includes business, building and other support services, wholesale trade, non-durable goods manufacturing, and agriculture,” Leach said in the report.

British Columbia, Quebec and the Atlantic provinces, with their higher media ages and share of older residents, could be disproportionately impacted by the silver tsunami.

In addition to the loss of labour in sectors where boomers work, there will also be a strain on the health-care and social services sectors as demand for those services goes up with a retirement wave.

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Canada’s fertility rate is also plummeting. The country’s total fertility rate (TFR) was 1.25 children per woman in 2024, marking a record low, Statistics Canada said in a report Wednesday.

In 2023, Canada joined the ranks of “ultra-low fertility” nations, where the rate is below 1.30. In 2024, the list included nations like Switzerland (1.29), Luxembourg (1.25), Finland (1.25), Italy (1.18), Japan (1.15), Singapore (0.97) and South Korea (0.75).

British Columbia had the lowest fertility rate of all provinces and territories at 1.02 children per woman, although it was up slightly from one child per woman in 2023. Nunavut (2.34) had the highest fertility rate in the country.

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Nova Scotia (1.08), Prince Edward Island (1.10) and Ontario (1.21) all had ultra-low fertility rates, while Quebec (1.34), the Northwest Territories (1.39), Alberta (1.41), Manitoba (1.50) and Saskatchewan (1.58) had slightly higher rates.

The average childbearing age in Canada is also rising. In 2024, the average age of mothers at the birth of their child reached a record high of 31.8 years, up from 26.7 years in 1976.