Labor shortages could be here for years, report suggests

Clogged airports, shuttered hospital emergency rooms, understaffed restaurants, high street storefronts with “help wanted” signs.

Canada’s shortage of qualified workers is ubiquitous: There are more than a million job openings across the country — according to a new report from BMO, the first since it began tracking in 2015 more unemployed.

While a higher percentage of people between the ages of 15 and 64 are in work today compared to 2019, changing demographics and an aging population mean more workers than ever are retiring, leaving a smaller number of Canadians of working age and huge gaps in the labor market. stay behind.

“We have more people who leave the labor market because of aging than people who enter the labor market because of aging. So we have the smallest cohort of working age since the 1960s,” explains Armine Yalnizyan, an economist and Atkinson Fellow on the Future of Workers.

With thousands of baby boomers retiring in the coming years, economists warn that Canada’s labor shortage problems are just beginning and could last for decades.

“We’re losing employees,” said Robert Kavcic, senior economist at BMO and co-author of the report. “And we don’t have good overlapping skills, with a lot of people retiring from the skilled crafts, but not a lot of individuals from the Millennium Cohort who have those skills to replace them.

“Anyone looking for an electrician, plumber or carpenter knows that supply in that segment of the job market is shrinking, and fast,” he said, adding that the healthcare sector is also significantly affected by a lack of qualified workers.

While economists have anticipated this labor shortage caused by an aging cohort of baby boomers for decades, the pandemic has exacerbated the problem, Kavcic said, with the hot job market leading to increased demand and an “extremely tight” job market.

Currently, the national unemployment rate is 4.9 percent, the lowest since 1970.

While there has been much talk during the pandemic about the “major layoff” and its potential impact on the labor market, unemployment figures prove the phenomenon didn’t materialize, said Tricia Williams, director of research, evaluation and knowledge mobilization at the Future Skills Center.

“The ‘big layoff’ was more of an American story than a Canadian one,” she said, noting that the Canadian market saw workers switch jobs during the pandemic, but did not leave the workforce completely.

The employment rate — a measure of those working or seeking work — between those 15 and 64 stood at 80 percent for the second quarter of 2022, up from 79.2 percent in 2019.

However, the overall employment rate for those 15 and older is declining and stands at 65.6 percent — down from 66.1 percent in 2019 and a peak of 67.6 percent in 2003.

“It is critical to note that this continued slow decline is almost entirely a function of underlying demographics – that is, a rapidly increasing proportion of the population in the retirement age groups – and less to do with people changing the labor force to other reasons for leaving,” MET report states.

While the federal government has taken some measures to mitigate the effects of an aging workforce — including gradually raising the age to qualify for old-age insurance and the guaranteed income supplements from 65 to 67 from 2023 — Williams doesn’t believe this will be enough. to be .

“That will be a short-term temporary solution to get a few extra workers from the baby boom generation for a certain number of years,” she said.

Williams said bridging the skills mismatch between retirees and younger workers entering the labor market is critical, adding that the government needs to do more to invest in the skilled professions and support immigrants so they can participate. to the workforce with the skills and qualifications they have.

“We’ve all heard the anecdotes about a doctor driving a taxi. It’s not only bad for that person, but also for Canada,” she said.

But the tight labor market also offers employers and workers the opportunity to reshape the future of work, Yalnizyan said. She believes that employers, especially those in sectors where the shortages are greatest, should do more to bring individuals from marginalized communities “into the mainstream of economic opportunity.”

“We could definitely hire more people with disabilities, low-income residents or indigenous peoples,” who have traditionally been sidelined, she said. “Instead, we’re just talking about opening the floodgates for temporary foreign workers.”

The labor shortage will also give workers more bargaining power than they’ve seen in half a century, she said, adding that the relatively small cohort of working age is likely to last for decades.

“Those workers will both have a responsibility to support those who are too young, too old or too sick through their work. But it also gives them the right to ask for better.”


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