OTTAWA (Reuters) - As baby boomers retire, the size of the work force will shrink dramatically relative to the number of people drawing pensions, a Statistics Canada study released on Wednesday showed.
As of last year, Canada had 4.5 times as many people in the labor force as retirees 65 years old or older. That ratio will shrink to between 2.5 and 2.8 by 2031, the statistics agency estimated.
Falling ratios normally present governments with the alternatives of forcing workers to pay more in taxes, or curtailing government expenditures, or a combination of both.
Statistics Canada took into account expected immigration, which helps supplement the work force, in arriving at its predictions.
But as in many industrialized countries, Canada’s fertility rate is below the rate of 2.1 children per woman that is needed to replace the current population. In the last year for which records are available, 2008, Canada’s fertility rate was 1.68. However, Statistics Canada analyst Laurent Martel said the rate was increasing, having risen from 1.51 in 2000.
Reporting by Randall Palmer; editing by Peter Galloway