Budget 2009: Older Workers

Older workers will benefit from the added funding to Targeted Initiative for Older Workers [TIOW], the 5-week add-on employment insurance benefits and provisions for long-tenured workers.

The $60 million added to TIOW over 3 years brings TIOW funding to $50 million a year when added to the amounts announced in 2008. The TIOW provides a range of employment activities for unemployed older workers and helps them stay in the work force. However, TIOW previously applied only in rural areas and the programs were largely targeted at single industry communities. Budget 2009 extends the TIOW to vulnerable cities with populations of less than 250,000.

Budget 2009 proposes five extra weeks of EI benefits to a maximum of 50 weeks for the next two years. Older workers will benefit from that extension as well as the measures for long-tenured workers. $500 million will be provided to extend EI benefits for longer term training and allow earlier access to EI benefits for workers who receive severance packages if they use some or all of that severance for skills upgrading or training.

Aspects of these changes were recommended in the government-commissioned Expert Panel on the Aging Worker Report which made key recommendations and policy proposals in three main areas: financial reform, legal protections as well as education/outreach initiatives.

The Organization for Economic Co-operation and Development has stated that raising the employment rate for older workers is critical to softening the blow of a shrinking labour force, which they foresee will have “major consequences for economic growth, public finance and living standards” in countries with aging populations.

The Canadian Conference Board has predicted severe labour shortages over the next decade. For Ontario alone, the CCB forecasts a labour shortage of 190,000 in 2020, rising to 364,000 and 564,000 by 2025 and 2030, respectively.

Canada lags behind other nations in developing strategies to attract and retain older workers. 67% of Canadian employers don’t even have a strategy in place to recruit or retain workers aged 50-plus and only 24% have implemented retention strategies to keep them participating in the workforce.

The proposed spending and EI changes will help but more can be done to remove barriers and disincentive to workforce participation of older workers. The government should institute workplace protection for older workers starting with introducing legislation to abolish mandatory retirement in all federally regulated industries, as well as those provinces and territories where it remains. In collaboration with the private sector, unions and civil society governments should undertake outreach/educational initiatives to promote the workforce participation of older workers.