Statistics Canada data reveals a shrinking, aging population. Do HR leaders need to rethink how they attract and retain talent?
Canada's population fell for a third consecutive quarter to start 2026, dropping by 55,025 people between January and April to an estimated 41,417,056, according to Statistics Canada. The decline – driven by a 20.2 per cent year-over-year drop in permanent immigration, a sharp pullback in non-permanent residents, and more deaths than births for the first time outside of winter's usual seasonal dip – marks the latest sign of a structural shift that is already reshaping how some HR leaders plan for talent.
The numbers follow an even starker milestone from earlier this year: Canada recorded its first-ever annual population decline since Confederation in 2025. Combined with new StatCan research showing the share of firms with an average worker age over 40 climbed from 26.2 per cent in 2001 to 42.3 per cent in 2022, the data points to a workforce that is both shrinking and greying – a dual pressure that talent leaders say demands immediate attention rather than a wait-and-see approach.
StatCan said the first-quarter figures are preliminary and will be revised in September.
Losing institutional knowledge
The trend lines aren’t cause for labour market optimism, says Rainu Singh, Vice President of Human Resources at Crown Property Management in Toronto.
“I see it as we're definitely going to be in trouble soon, to put it quite frankly,” Singh says. “The aging population, they're going to start retiring soon and you're going to see a dip in the institutional knowledge that a lot of the companies are going to lose – you're not just going to lose that person and that resource, you're losing a lot of knowledge with them.”
Singh points to shrinking average tenure as compounding the problem. “You don't typically see those employees who are staying 10, 15, 25 years anymore – typically, people are averaging less than five years now,” she says, adding that her own company brought in a dedicated senior talent acquisition specialist this year after struggling to fill niche roles in property accounting, a discipline she says is distinct enough from standard accounting that few candidates have the right background.
“You have to be more creative in the way that you look for talent and the way that you keep talent, and if you're not focused on both, something's going to fail somewhere,” says Singh. “You need a dedicated person who's solely focused on talent acquisitions, and if you don't have that at organizations who have as much churn and as much difficulty finding these very specific roles as we do, you end up getting the wrong talent and you're looking in all the wrong places as well.”
That struggle to find specialized talent while retaining institutional knowledge is a theme playing out across sectors, and one that echoes concerns raised by organizations reassessing how they hold on to their most experienced people even as hiring conditions shift.
Rethinking recruitment and retention when the talent pool shrinks
Shawn Gibson, Chief Human Resources Officer at Infotech Research Group in London, Ont., says the population numbers from StatCan track with what he has already seen on the ground, particularly in a technology sector that has historically leaned on immigration to fill skills gaps.
“I think it’s something to be concerned about, definitely in a pool where many organizations are looking for top talent like ours,” Gibson says. He outlines three priorities for employers competing in a tighter labour market: reassessing total rewards packages, building internal development programs so rising talent can be grown rather than recruited externally, and sharpening how aggressively talent acquisition teams pursue candidates rather than simply posting jobs and waiting.
“I think it's even more important to have those internal programs to allow for growth and development of employees,” says Gibson. “So there might be somebody who could be a rising star but might not have those skills – how can you provide internal programs rather than having to look externally, where it might be a bit of a challenge to find that talent in the marketplace?”
Upskilling and perks
Benefits renewal upskilling investment are the levers Gibson’s own organization is leaning on hardest right now, particularly as AI reshapes which skills matter, he says. “Upskilling is huge, and being able to provide those skills internally,” he says. “A lot of companies say they do that, but I think, at the end of the day, they don't really put their money where their mouth is.”
For Singh, a tighter labour market means it’s important to have the right HR programs, coaching, and growth opportunities for people who want to grow, plus having compensation and benefit platforms where people aren't constantly looking for the next thing because cost of living is high.
“Your strategy really is hitting a lot of things at once and, essentially, we need to make sure as HR we're wearing all those hats, but we're also focusing on the critical things – and talent is a critical thing.”
Automation and internal mobility
Singh points to automation as an inevitable response to a shrinking labour supply, though not a full substitute for people. “You're going to see a lot more of these efficiencies that are created through AI, where maybe you had a department that was four people before, you might be able to manage with two people now, and you might not have a choice,” she says. "AI is really just another efficiency tool, and you have to be able to utilize it in the right way so that you can benefit from it and you don't fall behind.”
Singh also expects an emphasis on internal mobility, as organizations lean on senior employees who can wear multiple hats – a pattern that aligns with StatCan findings that nearly one in four manufacturing workers is now 55 or older, up from under 10 per cent in 2001. Some experts have described this as a possible shift toward a “wisdom economy,” where judgment and experience are valued alongside technical knowledge as harder-to-replace assets.
“Experience is going to matter more than it used to, and someone who is grounded in that experience and who has spent time actually developing their own career foundation, it's probably going to be the best talent that you can find,” says Singh.
For organizations still calibrating recruitment strategy against these shifts, the broader conversation about what younger cohorts entering the workforce actually expect from employers is likely to intersect with succession planning as older workers delay retirement and younger workers become scarcer.
“I think there’s still tons of great talent out there, but it comes down to how attractive you can be as an employer to compete with other organizations and bring the talent in with what you're offering to the employees and also benefiting the families of those employees,” says Gibson.
