Canada’s labour market is entering a structural shift that may not be fully visible in today’s unemployment numbers.

RBC Economics points to two forces moving at the same time: a growing wave of retirements and a slower inflow of new workers.

🔹 Retirements are now running at roughly 25,500 workers per month, nearly double the level from two decades ago.

🔹 The youngest baby boomers will turn 65 in 2029, which means the current retirement wave still has several years to run.

🔹 Canada’s under-35 population declined by 120,500 over the past year, while the available workforce under 35 fell by 76,000.

🔹 Without immigration, RBC estimates that Canada’s population aged 15 to 34 would decline by about 186,000 per year over the next five years.

The near-term picture is complicated. Higher unemployment gives policymakers some room to maintain tighter immigration caps, and it may ease some of the pressure faced by younger workers trying to find their first jobs.

Longer term, the challenge shifts. As unemployment is absorbed, the underlying supply of available workers is expected to tighten again. RBC notes that some shortages are already visible, citing CFIB survey data showing about 17% of firms still reporting shortages of unskilled or semi-skilled workers, along with Bank of Canada survey data showing about one-fifth of businesses reporting labour shortages.

For employers and policymakers, the takeaway is that Canada’s labour market challenge is not only cyclical. Retirements, demographics, immigration policy, and workforce participation are all becoming central to long-term economic planning.

Source: RBC Economics