The Bank of Canada is sounding a new alarm over the economic challenges that the country will face as the workforce ages with not enough replacements coming in.
Though wages will likely increase as the worker pool shrinks, economists are issuing warnings over the likely resulting low interest rates and increased household debt.
“As our society ages, we can either accept a lower standard of living or we can try to be proactive and adjust,” said Jean Boivin, the Deputy Governor of the Bank of Canada. “The stakes are high and we cannot afford to ignore them.”
The Bank of Canada is particularly concerned that the country will not be able to increase productivity enough to offset these economic shifts. Other possible steps to take include working and saving more.
The Canadian government has taken one step toward addressing the challenge by raising retirement age as well as the Old Age Security eligibility.
Officials with the Bank of Canada have also trumpeted the potential of immigration, and the need to dissolve barriers that are preventing skilled and experienced workers from finding employment in their field.
Source: Financial Post
