Economic loss calculations can be seriously altered by a wave of
new retirement data
In a typical personal injury case, there are a number of
approaches to developing the theory of economic loss and a number
of assumptions are made as part of that theory. In cases
where a person is unlikely to return to work or has returned to
work but is likely to have to retire earlier than otherwise would
have been the case, a major part of the theory revolves around the
person's expected retirement age, but for the accident.
While each case turns on its own facts, to some extent both
plaintiff counsel and defence counsel will base their theories on a
presumed retirement age. Many defence theories
are based on an outdated notion that people are embracing the idea
of Freedom 55 and retiring earlier than in previous
generations. The recent data on this point clearly shows an
upward trend in retirement age. There are two very good
reasons for this trend; people are living longer and saving less
for retirement and people simply cannot afford to retire.
The Statistics Canada Life Tables synthesize the mortality
experience of a population and enables comparative measures of
expected longevity. The 2009-2011 Life Tables produced by
Statistics Canada were released on September 25, 2013. The Life
Tables available prior to 2013 were the 2000-2002 Life Tables
released on July 31, 2006. In this short time period, the
average life expectancy of females at birth in Ontario increased
from 82.04 years to 83.92 years and from 77.37 years to 79.77 years
for males. This trend is consistent with data going back to
1920 which shows a steady and dramatic decrease in mortality and
corresponding increase in life expectancy. The life
expectancy for females has increased from 61 years to 84 years from
1920 to 2011 and from 59 years to 80 years for males.
Statistics Canada also predicts that by 2036 the average life
expectancy could reach 88.4 years for females and 85.4 years for
On the retirement readiness front, the ING Direct Canada 2012
annual survey of Canadians reveals that 56% of Canadians were
concerned with not having enough income to sustain a good quality
of life during retirement. The results also indicate that 48%
of Canadians do not have a financial plan for retirement.
The Toronto Star recently reported
that only one third of the current Canadian workforce is covered by
an employer-sponsored defined benefit plan, with this percentage
steadily decreasing over time. Only one third of Canadians is
contributing to a registered retirement savings plan and nearly
half of those contributors are in the top 10 per cent of income
earners, making $150,000 a year or more. With Canada Pension
Plan benefits capped at just over $12,000.00 per year, the average
working Canadian will face the difficult choice between continuing
to work into their "golden years" or alternatively, to
accept a drastically reduced quality of life post-retirement.
Factors other than longevity and lack of savings are also at
play in terms of people's decision to postpone
retirement. A Statistics Canada Report released in October
2011 entitled Delayed Retirement: A new trend? details the
Work is becoming less physically demanding due to technological
Younger workers are starting full-time work later in life.
The aging workforce has changed the capacity to replace older
workers. The ratio of new workers to retired workers is
decreasing dramatically. In 1976, there were 2.3 younger
workers aged 25 to 34 years for each worker 55 years or over.
The ratio in 2010 was 1.3. The labour market is expected to tighten
due to the smaller incoming age cohort.
The effect of these various factors is already apparent in the
statistics surrounding retirement. Over the past 10 years
alone, the average retirement age of workers in the private sector
has increased from 61.5 to 63.5 for men and 61 to 63.1 for
women. A 2012 Statistics Canada report on retirement ages
sets out that in 2009, a 50-year-old worker could expect to
continue working for an average of 16 more years (16.3 years for
men and 16.1 years for women), which means retiring at the age of
66. In the late 1990s, expected working life at age 50 was an
additional 13 years. It is reasonable to assume that this
trend will continue and is likely to accelerate in the coming
None of us possesses a crystal ball, but a cautious
approach needs to be taken when considering retirement age as part
of the theory of economic loss, particularly with younger
plaintiffs whose "normal" retirement age would be decades
down the road. To suggest that a plaintiff that is currently
25 years of age would likely retire at age 60, but for their
injuries, ignores the current trends with regard to overall life
expectancy and work life expectancy.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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