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Labour Demand and Supply in Canada: The Big Picture

Labour Force Participation Rates

Concerns over labour shortages continue to be voiced by some leading employer organizations. The Canadian Federation of Independent Business, the Canadian Chamber of Commerce, and the Conference Board are among the groups that have identified shortfalls in the supply of workers as a priority public policy issue. Some individual industry sectors – from trucking to construction, the IT industry, mining, and the electricity sector, among many others – have produced reports that highlight current or projected national-level worker shortages in certain occupations. Such sentiments are also common among employers here in British Columbia.

Economists and other social scientists who analyze the labour market tend to be resistant to anecdotal stories and to the pleas of business owners scrambling to fill entry-level positions. They generally favour quantitative evidence to inform a well-grounded understanding of relevant trends in the economy.  And on the whole, it is fair to say that evidence of widespread labour shortages in Canada has been slow to emerge – if it exists at all.

Report Highlights

  • There is little quantitative evidence pointing to widespread shortages of labour in Canada today, nor are significant national-level shortages expected in the foreseeable future.
  • Unlike many other advanced economies, Canada can look forward to continued growth in the size of the working-age population, with the labour force projected to expand by between 2 and 4 million people between 2010 and 2031.
  • Canada still has room to augment the labour force by boosting participation rates among women, First Nations, first-generation immigrants, disabled persons, and individuals aged 60 and over.
  • Federal government projections through the early 2020s suggest a “balanced outlook” for labour supply and demand in occupational categories accounting for approximately two-thirds of existing jobs.  Occupations representing 14% of current employment are expected to experience “shortage conditions,” while occupations constituting 18% of the current workforce are likely to see an excess supply of labour.
  • Despite Canada’s relatively favourable overall labour supply situation, there continue to be shortages of qualified workers in some occupations and regions.  Such shortages may intensify as the labour force growth rate slows post-2020.
  • More can and should be done to ensure that Canada’s education, training and immigration systems and policies are better aligned with and responsive to shifts in the demand for skills and changes in technology and the competitive environment.
  • To succeed in the future, many Canadian enterprises and academic institutions must have the ability to recruit and retain specialized global talent to help grow companies, drive innovation, build new markets for products and services, and lead research.  This imperative of global talent acquisition needs to be reflected in immigration policies and processes.

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