If Canadians are going to work past the typical retirement age, the public and private sectors should consider incentives in order to make ongoing employment more financially advantageous to these older workers, according to a panel discussion at the Conference Board of Canada’s Pensions Summit 2016 in Toronto on Tuesday.
One option the federal government may want to consider is to lower tax rates for older Canadians who choose to stay in the labour market past the age of 65, suggested Glen Hodgson, senior vice president and chief economist for the Ottawa-based Conference Board of Canada based.
Seniors who continue to work are often thought to be constrained by their finances, but they are also contributing to an economy that’s being affected by an increasingly older population.
Almost a quarter of Canadians will be over the age of 65 by 2035, and there is concern about what the growing proportion of seniors will do to the Canadian economy if they exit the workforce.
Canadian companies are already seeing the effect of an aging population on their revenue, Hodgson says.
“There is more evidence emerging that more Canadian companies are looking to take their capital [offshore] to where the workers are,” he said.
Companies will also have to reconsider their own policies to accommodate a growing number of older Canadians who choose to remain in the workplace, added Susan Eng, a pension advocate.
For example, companies need to rethink their group benefit plans so that older Canadians will still benefit from them. Employee health coverage tends to be unavailable for workers who are 71 or older, with some coverage even ending at the age of 65, says Eng.
Eng reminded the audience that seniors are now more active individuals who may work out of financial need or because they enjoy their work but regardless, they continue to contribute to society.
“Today’s senior is not your grandmother’s senior,” Eng said. “If we have good pensions, we might think of flying off to a vacation home but mostly a lot of people in their 60s are thinking about working and [continuing] to work.”
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