Canada’s demographic squeeze. What an ageing workforce means for jobs and staffing
Baby-boomers last wave of retirement
Today’s unemployment rate is high as economic circumstances are unfavourable for job creation. However, under the hood, Canada is at a crossroads. The country’s largest generation (the baby boomers) is heading into retirement just as population growth slows. For decades, these workers anchored the labour force. Now, as they step away, the country faces a structural shortage that will touch nearly every sector.
The signs are already here. Older Canadians now make up more than one in five workers, double their share at the turn of the millennium. But they cannot work forever. Their exit means not just a loss of numbers but of skills, experience, and leadership at a scale Canada has never had to replace.
At the same time, fewer new workers are arriving to take their place. Fertility rates remain low. Immigration continues, but policies are evolving and settlement is uneven across regions. The result is a thinner pipeline of working-age people to balance out the retirements.
A Labour Market Under Strain
The consequences are visible in the numbers. A decade ago, there were four unemployed Canadians for every job vacancy. Today, in many regions, there are barely two and in some sectors, the number is closer to one.
Job openings stay unfilled longer, especially in healthcare, construction, and food services. In hospitals, staff shortages delay care; in construction, housing projects compete for too few skilled tradespeople. Agriculture and mining face the same challenge: younger workers aren’t lining up to replace those set to retire.
What was once a cyclical shortage is now becoming a permanent feature of the labour market. Scarcity is the new baseline.
Staffing Firms on the Front Lines
For staffing and recruitment firms, this is not just a headwind, it’s a transformation of the playing field.
When talent is scarce, firms that can move quickly and tap into unconventional pools of candidates have a distinct edge. The role of staffing shifts from simply filling jobs to managing scarcity itself.
That means:
Deeper pipelines. Agencies with broad networks and access to hard-to-find talent will be in demand.
Skills over résumés. Placing people based on competencies and trainability, not just perfect experience, becomes critical.
Retiree engagement. Semi-retired workers who want flexible, part-time or consulting roles could become an important source of talent.
Geographic reach. Looking across provinces or even borders for candidates will grow more common, with remote work smoothing the path.
Advisory roles. Employers will expect help with workforce planning: which roles are at risk, how to manage succession, how to reskill.
The firms that thrive will be those that stop selling headcount and start selling strategy.
The Limits of Policy Levers
Immigration remains a powerful tool, but it cannot fully offset retirements, especially if newcomers struggle with credential recognition or if they cluster in urban centres while shortages deepen elsewhere.
Technology offers some relief. Automation and AI can ease staffing pressure in certain industries, but many roles, from nursing to construction, resist easy replacement. At the same time, labour shortages themselves may speed up adoption of new tools, forcing workers and employers alike into a cycle of rapid adjustment.
Underutilized groups also matter. People with disabilities, caregivers returning to work, and those who have stepped out of the labour market could help fill gaps if policies and workplaces adapt to include them.
A Future of Scarcity
The retirement wave cannot be stopped. The question is how quickly Canada adapts. Employers that rethink job design, offer flexibility, and invest in training will weather the storm better. Staffing firms that specialize, innovate, and anticipate will become indispensable.
The coming years will test the resilience of Canada’s labour market. But they will also reward those who recognize a simple truth: scarcity is not just a problem to solve. For those prepared, it is also an opportunity.