Canadians must have more opportunity to extend their working lives, both for the sake of the economy and workers themselves, argues a new report from the Organization for Economic Co-operation and Development.

The report notes that if Canadians continue to retire early, population ageing will lead to a pronounced slowdown in labour force growth and weaker economic growth. I

It also suggests that many older Canadians would prefer to remain in paid employment for longer if the appropriate policies and workplace practices were in place.

Canada should do more to improve employment opportunities for older Canadians whose participation rates are still below the levels in several other OECD countries, it argues.

It recommends:

  • increasing flexibility for combining pensions with work income by abolishing the clause in the CPP which requires workers to stop working a month before the first pension payment;
  • reviewing the income tax and private pension systems, notably the federal government should review the rules which prohibit the simultaneous accrual and receipt of benefits, and unions and employers should increase the possibilities for phased retirement under defined benefit plans;
  • allowing people to accumulate future pension rights;
  • surveying the extent of age discrimination in the workplace;
  • strengthening the employment services for the unemployed;
  • increasing participation of older job seekers in employment programs;
  • providing better employment assistance, in particular greater provision of training, for older people; and,
  • increasing the resources available to employment programs.

Notwithstanding its concerns, the OECD’s report notes that Canada is better placed to meet the challenges of population ageing, than many other OECD countries. It says Canada’s population is not expected to age as rapidly or as extensively as in Japan and many European countries. It notes that past reforms have strengthened the financial sustainability of public expenditures on old-age pensions. And, the labour market situation of older Canadians has improved considerably in recent years.