C. D. Howe urges federal government to raise normal retirement age, delay pension access to ease demographic pressures
April 10, 2025
The C.D. Howe Institute has called on the federal government to gradually raise the normal retirement age from 65 to 67 to help sustain public pension systems and ease demographic pressures.
In its 2024 Labour Market Review, the think tank also suggested that the federal government consider delaying the earliest access age for pension benefits, noting that Canada ranks towards the bottom of Organisation for Economic Co-operation and Development nations for labour force participation and employment among certain population segments, including seniors.
In the institute’s view, the low ranking is explained at least in part by our normal retirement age of 65, together with the availability of pension benefits as early as age 60, which incentivize early retirement.
For example, while 14 per cent of Canadian over-65s are employed, the institute wrote that the figure for Iceland — where the normal retirement age is 67 and earliest pension access is at age 65 — stood at 32 per cent.
The report suggested Canada revisit the plan announced by the federal government in 2012, to gradually raise the eligibility age for Canada’s Old Age Security benefits from 65 to 67. That change was due to kick in beginning in 2023, but the plan was cancelled.
“This approach aligns with successful international models, though it requires careful implementation to account for differences in job types and income levels,” the report’s authors wrote. “Seniors today are healthier and living longer, and delaying retirement can offer both personal and economic benefits and ease demographic transitions.”
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