A recent study from the Conference Board foresees that tightening of the labour market from 2016 will have an impact on the Canadian economy's growth potential in the long term.
According to the Conference Board's forecasts, Canada is not expected to return to full employment within the next four years. This situation is similar to what the country experienced before the 2008-2009 economic crisis. The unemployment rate was then about 6%. Baby boomer retirements will not have the expected effects on the economy, at least not immediately. They should be delayed by several factors, such as high levels of immigration, the arrival of more women in the labour market and baby boomers working longer. After 2014, the number of people retiring is expected to increase, resulting in a tightening labour market and requiring employers to raise wages. To succeed, companies will have to increase productivity, according to the research group's findings.
Low growth
Canada's GDP is not expected to keep up the same pace in the next few years. Initially it will grow at 2.7% per year on average by 2016. The Conference Board forecasts a 2.3% rate of growth in 2012 and 2.8% in 2013. After 2016 it will be 2.1%. This decline will be due to the slowdown in household spending in an aging population with reduced working capacity.