CANADA - The Canadian government and private sector must halt the trend towards early retirement if the country is to avoid a deepening skills shortage, according to economists at TD Bank.
Don Drummond, senior vice president and chief economist at TD Bank, and Derek Burleton, senior economist, believe that Canada's standard of living is under threat from the dual challenge of baby boomers taking early retirement and the growth in demand for workers possessing technical skills.
Drummond and Burleton believe that Canada's existing skills shortage will be exacerbated by the expected wave of early retirements, as the baby-boom generation makes up approximately one-third of Canada's population.
Despite the fact that the first wave of baby boomers will reach 65 by 2011, TD Bank believes that the trend towards early retirement will mean that both the government and businesses will face a labour shortage even sooner. Drummond explained: In addition to the increasing desire to substitute leisure for work, changes in pension rules in the public and private sectors, which offer unreduced pensions in many cases before the age of 60, have been an important driver in this choice to retire early.
TD Bank claims that one way to combat the skills shortage would be to encourage people to put off retirement. The private sector could encourage older workers to stay in the labour force by establishing flexible work arrangements and tailor-made compensation packages. Other measures include changing immigration laws to speed up the processing of technically skilled migrants.
Additionally, Drummond and Burleton claim that the need to retain older workers raises the question of whether areas such things as the mandatory retirement and age of entitlement to public pensions should be reconsidered.
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