As Canadians, many of us occasionally marvel at the differences between us and our American counterparts. In many ways, we seem to be the same but in others, we’re not. How so?

One particular difference has recently come to light. An interesting article in The Globe and Mail made the following observation:

Faced with a deadly pandemic and flush with cash, millions more Americans than usual have opted to retire. Canadians haven’t followed their lead.

Americans are currently retiring in record numbers. We’re not. Why not?

The evidence for this divergent trend comes from Statistics Canada, who report that labour participation rates here at home are higher today than two years ago for those aged 55 to 64, and they are barely lower for the 65-plus demographic.

In a supporting commentary published on Stockwatch, economist Doug Porter said: “Now, people can of course retire at any age,” before adding that though the age bracket for early retirement is those aged 60 to 64, “there is zero evidence that Canadians are pulling away from the labour force in big numbers” for that group. Quite the opposite.

Analyzing This Retirement Trend

The Globe and Mail story cited the findings of an economic bulletin distributed by the Federal Reserve Bank of Kansas City which reported the following in a statement: What Has Driven the Recent Increase in Retirements?

“During the pandemic, the share of retirees in the U.S. population rose much faster than its normal pace. Typically, an increase in this share is driven by more people transitioning from employment to retirement. However, we show that the recent increase was instead driven by fewer people transitioning from retirement back into employment, likely due to pandemic-related health risks. More retirees may rejoin the workforce as these health risks fade, but the retirement share is unlikely to return to a normal level for some time.”

The fact is that the pandemic has hit the U.S. very hard. Reports The Globe and Mail: “Adjusted for population, confirmed deaths owing to COVID-19 are about three times higher than in Canada. And despite progress in both countries thanks to vaccinations, the recent trend shows that U.S. infections are running four times higher.”

So, what does that mean for seniors and the workforce?

  • As vaccinations continue to increase and health risks fade, more U.S. retirees will likely transition back to employment, the Kansas City Fed paper reported.
  • During the first year of the pandemic, it was more likely that Canadians aged 55 and up were laid off permanently than retired, the Statscan numbers show.

Some Backstory

What happened was that many older Canadians – through a mixture of caution and common sense – decided to hang on to their jobs as the pandemic upended the economy, though this may not prove to be a permanent reality. Essentially, they are refusing to retire until they’ve decided it’s the right time. Canadian retirements haven’t been lost; they have simply been delayed.

Time Will Tell

Still, that remains bad news for many potential employers, especially those operating in retail and the hospitality industry. Positions normally filled by retirees who often sought out part-time employment in order to supplement their pension incomes after retirement are not being filled as they once were. This is because many seniors are refusing to retire and are choosing to continue to carry on working beyond retirement age in their chosen professions whenever possible.

As anyone who has visited the mall recently or tried to get service in a restaurant or bar, both categories are significantly understaffed. That’s a shame – and it will be interesting to see how retirement (or a lack of) impacts the workforce in 2022.