04/18/2012 08:31 EDT | Updated 06/18/2012 05:12 EDT

Canada Economic Outlook: Conference Board Says Retiring Baby Boomers Will Slow Economy

OTTAWA - A new Conference Board report says tight labour markets after 2016 will curtail the economy's long-term potential for growth.

The think tank's most recent long-term forecast predicts overall real GDP in Canada will grow at an average of 2.7 per cent between now and 2016.

The report says the rate of growth is expected to be 2.3 per cent this year, followed by 2.8 per cent next year.

The Conference Board attributes modest growth in household spending and fiscal restraint by all levels of government for the relatively slow economic growth over the next couple of years.

The report says higher levels of immigration, more women in the workforce and baby boomers working longer to recoup losses to their nest eggs will temper the short-term effects of boomer retirements.

After 2014, more baby boomers are expected to retire, which tighten labour markers and put pressure on employers to increase wages.

The Conference Board says the Canadian economy is forecast to grow at an average of 2.1 per cent after 2016.

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