Canadian Demographic Shift
Cause for Concern.
Canadians need to brace for a major restructuring and slowdown in the country's economy a decade from now, according to research by economic forecasters at Global Insight (Canada) Inc.
The aging of Canada's population means the most the economy can expect to grow in any given year will be less than a measly 2 per cent, they predict. For now, Canada's economic growth potential is about 3 per cent a year -- the most the economy can grow without overheating and causing inflationary pressure.
But when baby boomers retire and the work force stops expanding, the only thing driving the Canadian economy will be productivity growth. And even if productivity were to expand by an optimistic 1.7 per cent a decade from now, potential economic growth would drop to less than 2 per cent, said senior economist Wojciech Szadurski.
'Canada seems to be on the verge of economic transformation driven by demographic change,' he said in a teleconference. 'What is most striking is that employment will stop growing over the next 20 years.'
The aging of Canada's population means the most the economy can expect to grow in any given year will be less than a measly 2 per cent, they predict. For now, Canada's economic growth potential is about 3 per cent a year -- the most the economy can grow without overheating and causing inflationary pressure.
But when baby boomers retire and the work force stops expanding, the only thing driving the Canadian economy will be productivity growth. And even if productivity were to expand by an optimistic 1.7 per cent a decade from now, potential economic growth would drop to less than 2 per cent, said senior economist Wojciech Szadurski.
'Canada seems to be on the verge of economic transformation driven by demographic change,' he said in a teleconference. 'What is most striking is that employment will stop growing over the next 20 years.'
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