One potential but often overlooked solution involves encouraging individuals approaching retirement age to extend their working lives. Estonia anticipated this impending labour shortage and has already taken steps to promote longer careers. The Estonian Active Ageing Development Plan 2013–2020 was the first step which prioritizes the extension of working lives, aiming to reduce unemployment and inactivity among older age groups. Consequently, Estonia boasts one of the EU's highest employment rates, reaching 68% among 15–74-year-olds in 2018. This success is attributed partly to a favourable tax system for working pensioners but also to a culture that is more accommodating to older individuals than in other Central and Eastern European countries (European Commission 2018).
In contrast, Canada faces societal pressures and disincentives from various quarters for individuals to continue working beyond retirement age. To address this challenge, the Canadian government, for example, could explore options such as raising the threshold for CPP clawbacks, or delaying the mandatory age for seniors to begin withdrawing from their RRSPs, thus minimizing their taxable income.
Businesses and organizations also play a pivotal role. After adapting nimbly during the COVID-19 pandemic, they should strategically encourage experienced employees to remain involved and pass on their expertise to the next generation. This could involve flexible work schedules and vacations that accommodate personal interests without necessitating career sacrifices.
Society at large must contribute as well. Instead of pressuring those over 65 to retire, we should celebrate their continuation in the workforce, encouraging them to remain engaged in their industry or even explore new careers, provided their health and caregiving responsibilities allow. Many individuals, in hindsight, report retiring earlier than they wished due to societal expectations.
A shift in mindset is essential from government, organizations, and society to effectively address one of the most significant challenges, aside from climate change, that countries like Canada currently face. While immigration has historically been a crucial component of Canada's success, it's vital to recognize that it alone cannot solve the labour shortage puzzle caused primarily by mass retirements. Addressing this issue directly should be a priority.
