Mandatory Retirement in Canada: A Thing of the Past
For many Canadians, the age of 65 has long been viewed as the definitive time to stop working. This traditional view was solidified by pension plans and government benefits designed around this benchmark. However, the legal landscape has changed significantly. In recent years, all Canadian jurisdictions have put an end to mandatory retirement based on age alone, extending human rights protections to older workers. This legislative shift recognizes that older adults are healthier, more skilled, and increasingly choosing to work longer.
The Legal Reality: Age Discrimination Laws
The abolition of mandatory retirement is rooted in human rights legislation at both the federal and provincial levels. These laws make it illegal for employers to terminate an employee simply because they have reached a certain age. Instead, employment decisions must be based on a person's ability to perform their job, not on an arbitrary number.
- Provincial and Territorial Laws: Each province and territory has its own human rights code that prohibits age-based discrimination. For example, British Columbia's Human Rights Code protects individuals 19 and over from being forced to retire. Ontario followed suit in 2006 with the Ending Mandatory Retirement Statute Law Amendment Act.
- Federal Laws: For federally regulated industries, the Canadian Human Rights Act provides similar protections. An employer cannot have a blanket policy that forces an employee to retire at 65.
The Exceptions: When Mandatory Retirement is Still Allowed
While the general rule protects against forced retirement, there are limited exceptions. These exceptions apply when age can be demonstrated as a bona fide occupational requirement (BFOR). To justify a mandatory retirement policy as a BFOR, an employer must prove three things:
- The standard was adopted for a purpose that is rationally connected to the job.
- The standard was adopted with a good faith belief that it was necessary for that purpose.
- The standard is reasonably necessary to accomplish that purpose, meaning it would be impossible to accommodate employees individually without undue hardship.
Examples of positions that may have a mandatory retirement age include:
- Judges: Federal judges have mandatory retirement ages, which vary depending on the court.
- Pilots and Firefighters: Some safety-sensitive positions, like airline pilots and firefighters, may have age-related retirement requirements, though these must be justifiable under human rights legislation.
Understanding the 65-Year-Old Benchmark
Even though 65 is no longer a mandatory retirement age, it remains a significant milestone in many Canadians' financial lives. This is primarily because key government benefits are structured around this age.
- Canada Pension Plan (CPP): You can start collecting your CPP retirement pension as early as 60 with a permanent reduction, or defer it up to age 70 for a higher monthly payment. The standard, unreduced pension begins at 65.
- Old Age Security (OAS): The OAS pension begins at age 65, though you can also defer it up to age 70 to receive a higher monthly amount.
Many private pension plans are also coordinated with these government benefits, which is why 65 remains a common, but not compulsory, target.
The Pros and Cons of Working Past 65
Deciding to continue working beyond 65 has both financial and personal implications. It's a personal choice that requires careful consideration of several factors.
| Aspect | Benefits of Working Longer | Downsides of Working Longer |
|---|---|---|
| Financial | Increased retirement savings (RRSPs, TFSAs); opportunity to defer CPP/OAS for larger payments; delayed reliance on savings. | Potential for age-based benefit reductions; may delay access to some pension funds; can impact tax situation. |
| Personal | Maintain social connections; continued mental and physical engagement; sense of purpose and routine. | Potential for age-related health issues impacting job performance; burnout; less time for leisure activities or family. |
| Career | Opportunity to mentor younger staff; share expertise; potentially transition to part-time or flexible work. | Risk of perceived ageism from younger colleagues or management; potential for performance issues based on age, which could lead to termination. |
Employer Obligations and Best Practices
With mandatory retirement gone, employers must adjust their practices to avoid age discrimination complaints. It is now illegal to target older workers for downsizing or to assume they will retire based on their age. Instead, employers should focus on performance-based evaluations, create inclusive workplaces, and provide training opportunities to all employees, regardless of age.
It is important for both employers and employees to be aware of the laws surrounding age discrimination. While an employer can inquire about an employee's retirement plans for succession planning, they cannot pressure or coerce an individual into retirement. The conversation must be handled delicately to avoid discrimination claims. For reliable information on age discrimination laws in Ontario, employees can consult the Ontario Human Rights Commission at https://www.ohrc.on.ca/en/resources/Policies/agepolicyen/pdf.
The Future of Retirement in Canada
The elimination of mandatory retirement reflects broader demographic shifts in Canada, including increased longevity and the desire of many to remain in the workforce longer. This trend is reshaping how we view retirement, moving it from a fixed age to a more fluid, personal transition. As the population continues to age, the conversation will shift from if a senior citizen works to how they can be best supported and integrated into the workforce, whether full-time, part-time, or in phased retirement.
In conclusion, the decision to retire is a personal one in Canada. The age of 65 is no longer a legal obligation, but a financial marker that individuals can choose to align with or not. Understanding your rights and benefits is crucial to making an informed decision that aligns with your financial and personal goals.
Frequently Asked Questions About Retiring in Canada
Q: What is the earliest I can take my CPP in Canada? A: You can start receiving your CPP retirement pension as early as age 60, but doing so will result in a permanently reduced monthly payment.
Q: Does my OAS automatically start at age 65? A: Service Canada may automatically enroll you for OAS at age 65 if you are eligible. However, you can also choose to defer your payments to receive a higher amount later, up to age 70.
Q: Can my employer ask about my retirement plans? A: An employer can ask about your future career plans, including retirement, for succession planning purposes. However, they must not use this information to pressure you into retirement, as that could be considered age discrimination.
Q: Are there any jobs in Canada that still have a mandatory retirement age? A: Yes, very specific jobs can have mandatory retirement ages, but only if age is a bona fide occupational requirement (BFOR). This is rare and typically applies to roles with significant public safety concerns, like federal judges or some pilots.
Q: What is the advantage of delaying CPP and OAS past 65? A: Delaying your CPP and OAS payments until age 70 results in a significantly higher monthly payout for the rest of your life. For CPP, the increase is up to 42%, and for OAS, it's up to 36%.
Q: Can I be terminated for poor performance after age 65? A: Yes, an employer can terminate any employee, regardless of age, for legitimate, non-discriminatory reasons such as poor performance. The key is that the reason for termination cannot be your age.
Q: What should I do if I feel I'm being forced to retire due to my age? A: If you believe you are a victim of age discrimination, you can file a complaint with your provincial or territorial human rights commission. It is also advisable to seek legal counsel specializing in employment law.
