The COBOL Developer Shortage in Canada: How Bad Is It and What Can You Do?

The average COBOL developer in Canada is over 55 years old. No Canadian university has taught COBOL in over two decades. The talent pool that maintains the systems processing your mortgage payments, tax returns, and insurance claims is shrinking by 10-15% every year — and there is no one coming up behind them. Canada's disproportionately large COBOL footprint in banking and government makes this talent crisis more acute here than almost anywhere else in the world.

This is not a future problem. It is happening now. Canadian organizations are already paying emergency contractor rates of $300-400 per hour for COBOL expertise that was readily available at a fraction of that cost a decade ago. Knowledge transfer projects are failing because the complexity of these systems cannot be captured in documentation alone. And every year, the people who understand how these systems actually work get one year closer to retirement.

How Many COBOL Developers Are Left in Canada?

The honest answer is that no one knows the exact number, but the best estimates paint a stark picture. Canada has approximately 2,000 to 3,000 active COBOL developers, down from roughly 10,000 in the early 2000s. That is a decline of 70% or more in just two decades, with the rate of attrition accelerating as the remaining workforce ages.

The demographics are the core of the problem. The average age of a COBOL developer in Canada is estimated at 55-60, with a significant portion already in their mid-to-late 60s. Many are working past traditional retirement age specifically because their employers cannot afford to lose them. When these developers do retire, the knowledge they carry — not just about COBOL syntax, but about the business logic, workarounds, and interdependencies built up over 30-40 years — leaves with them permanently.

The pipeline of new talent is effectively zero. No Canadian university teaches COBOL as part of its computer science curriculum. The last institutions to offer it dropped the language from their programs in the early 2000s. Online learning resources exist, but learning COBOL syntax is trivially different from understanding a production COBOL system with hundreds of thousands of lines of code, decades of patches, and business logic that was never formally documented.

Immigration is not a realistic solution either. COBOL developers are scarce globally, and Canada's immigration system does not specifically prioritize legacy programming skills. The countries with the largest COBOL workforces — the United States, the United Kingdom, and India — face their own talent shortages and are competing for the same shrinking pool of expertise. A senior COBOL developer with mainframe experience can command premium rates anywhere in the world, and Canada has no particular advantage in attracting them.

Which Canadian Organizations Are Most Exposed?

The COBOL talent shortage does not affect all organizations equally. The most exposed are those with the largest legacy codebases, the highest transaction volumes, and the most stringent regulatory requirements. In Canada, that means banking, government, insurance, and transportation.

The Big Five Banks

RBC, TD, Scotiabank, BMO, and CIBC collectively maintain millions of lines of COBOL code that power core banking functions — account management, payment processing, loan origination, and regulatory reporting. These systems process billions of dollars in transactions every day. The banks have been investing in modernization for years, but the sheer scale of their COBOL footprints means the work will take decades at current rates. Meanwhile, the developers who understand these systems are retiring faster than knowledge can be transferred. For a detailed look at how Canada's banks are approaching modernization, see our analysis of mainframe modernization at Canadian banks.

The Canada Revenue Agency and Federal Government

The CRA runs critical tax processing systems on COBOL that directly affect every Canadian taxpayer. The federal government has publicly acknowledged the challenge — the CRA's legacy modernization has been a topic of Auditor General reports for years — but progress has been slow. Government pay scales make it particularly difficult to retain COBOL talent when the private sector offers significantly higher compensation. Our detailed breakdown of CRA legacy system modernization covers the specific challenges and timelines facing the agency.

Insurance and Financial Services

Manulife, Sun Life, Intact Financial, and other major Canadian insurers run policy administration, claims processing, and actuarial systems on COBOL. These systems are deeply embedded in regulated workflows, which means any modernization effort must maintain perfect regulatory compliance throughout the transition. The insurance sector faces the additional challenge that many of its COBOL systems encode complex business rules — policy terms, coverage calculations, claims adjudication logic — that were implemented directly in code without formal specification documents.

Airlines and Transportation

Air Canada and other Canadian carriers have COBOL dependencies in reservation systems, crew scheduling, maintenance tracking, and operations management. These systems require near-perfect uptime — 99.99% or higher — which makes modernization exceptionally risky and has historically been a reason to delay rather than act. Credit unions across Canada also maintain COBOL-based core banking platforms, often shared through service providers like Celero Solutions and Central 1 Credit Union.

What Happens When Your Last COBOL Developer Retires?

This is not a hypothetical question. Smaller Canadian organizations — credit unions, regional insurers, provincial agencies — have already experienced what happens when their last in-house COBOL expert leaves. The consequences are predictable and severe.

Tribal knowledge vanishes overnight. The most dangerous aspect of COBOL developer retirement is not the loss of coding ability — it is the loss of institutional knowledge. Senior COBOL developers carry decades of context about why specific business rules were implemented, which workarounds exist for known edge cases, and how seemingly unrelated systems depend on each other. This knowledge is almost never fully documented because it accumulated organically over 20-30 years of maintenance and modification. When the developer walks out the door, that knowledge is gone permanently.

Emergency contractor rates become the norm. Once an organization loses its in-house COBOL capability, it becomes dependent on a shrinking pool of contractors. Current emergency rates for experienced COBOL contractors in Canada range from $200 to $400 per hour, and these rates are climbing annually. For an organization that needs regular COBOL maintenance, this can translate to hundreds of thousands of dollars per year in contractor costs — often exceeding what it would have cost to begin a modernization program years earlier.

Knowledge transfer projects fail more often than they succeed. Many organizations attempt to solve the problem by having retiring developers document their systems or train replacements before they leave. In practice, these knowledge transfer efforts routinely fail. The complexity of a mature COBOL system — with its layered modifications, undocumented side effects, and implicit dependencies — simply cannot be captured in a six-month handover. The new developer may understand the code at a syntactic level but lacks the deep contextual knowledge needed to maintain it safely.

The real-world consequences are operational. Delays in implementing regulatory changes because no one can safely modify the code. Extended outages when something breaks and the only person who understands the subsystem is unavailable. Inability to add new features or integrations because the risk of breaking existing functionality is too high. And in the worst case, a forced emergency migration under time pressure — which Deloitte Canada estimates costs 2-4 times more than a planned, phased approach.

How Does AI Change the COBOL Talent Equation?

The emergence of AI-powered code analysis tools fundamentally changes the calculus around the COBOL talent shortage. Not because AI replaces COBOL developers — it does not — but because it dramatically reduces how many of them you need and what you need them for.

The most time-consuming and expertise-intensive part of any COBOL modernization project is the analysis phase. Understanding what the code does, mapping dependencies, documenting business logic, and identifying risks typically consumes 60-70% of total project time. This is precisely the phase that requires deep COBOL expertise — and it is precisely the phase that AI can now automate.

AI tools can now ingest an entire COBOL codebase and produce comprehensive dependency maps, workflow documentation, risk assessments, and business logic inventories in weeks rather than months. This means organizations no longer need a team of senior COBOL developers spending a year or more just to understand what they are working with. A smaller team with AI assistance can accomplish in weeks what previously required months of expensive specialist time.

For a comprehensive look at how AI-powered tools are being applied to COBOL modernization specifically, including the four-phase methodology and what it means for Canadian enterprises, see our guide to AI-powered COBOL modernization.

The practical impact on the talent equation is significant. Instead of needing 10-15 senior COBOL developers for a major modernization project, an AI-assisted approach might require 3-5, supplemented by modern-language developers who review the AI's analysis and implement the target architecture. This does not eliminate the need for COBOL expertise entirely, but it reduces the dependency to a level that is actually achievable given the current talent market.

AI also helps preserve institutional knowledge before it is lost. By running AI analysis on COBOL systems while experienced developers are still available to validate the results, organizations can capture and formalize the tribal knowledge that would otherwise disappear at retirement. The AI documents the “what” and “how” of the code, and the experienced developer confirms the “why” — creating a permanent record that survives their departure.

What Should Canadian CIOs Do About the Talent Gap?

The window for proactive action is narrowing. The bulk of Canada's remaining COBOL developers will reach retirement age between 2026 and 2032. Organizations that have not started addressing the talent gap by now are already behind. Here is a five-point action plan:

1. Inventory your COBOL footprint immediately. You cannot manage a risk you have not measured. Map every COBOL system, its line count, business criticality, transaction volume, and upstream and downstream dependencies. This inventory is the foundation for everything that follows.
2. Conduct a talent risk assessment. For every COBOL system, identify who maintains it, their age and expected retirement timeline, and what happens if they become unavailable. Rate each system on a scale from “fully documented with multiple maintainers” to “single point of failure with no documentation.” The systems in the latter category are your highest-priority risks.
3. Run an AI-assisted pilot analysis. Select a non-critical COBOL subsystem and run AI-powered analysis on it while your experienced developers are still available to validate the results. This accomplishes two things: it preserves institutional knowledge in a structured format, and it gives your leadership team concrete evidence of what AI-assisted modernization looks like. For guidance on building the business case, see our CIO playbook for AI on legacy enterprise systems.
4. Build a phased modernization plan. Based on your inventory and risk assessment, create a prioritized roadmap that tackles the highest-risk systems first. Phased modernization — migrating one component at a time with rigorous testing — is the only approach that works reliably for mission-critical COBOL systems. Avoid big-bang rewrites, which have a well-documented failure rate.
5. Set a hard timeline and stick to it. The economics of delay work against you. Every year you wait, the talent pool shrinks, contractor rates increase, and the risk of a forced emergency migration grows. Proactive modernization costs a fraction of what reactive, crisis-driven migration costs. The AI tools available today make the economics more favorable than they have ever been — but only if you act while you still have experienced developers to validate the work.

Key Takeaways