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Surveying the labour landscape

Thursday August 28, 2014 Written by 
A new study spotlights demographic and geographic employment trends across the country.

"While the breadth of Canada's labour shortage is debatable, tight labour markets exist in certain parts of the country, including Western Canada, where employers are taking steps to enhance their existing labour force without hiring new workers," said Philip Cross, author of the Fraser Institute's new report Do Labour Shortages Exist in Canada?

For example, more employers are encouraging employees to delay retirement and work longer hours with more overtime. Nearly one-third of Albertans work more than 50 hours a week. In fact, the number of Alberta employees paid to work overtime rose by 57 per cent over the past decade, and 60 per cent in Saskatchewan, compared to a 3.3 per cent rise in the rest of Canada.

But according to Cross, a former chief economic analyst with Statistics Canada, this situation is unsustainable due to Canada’s rapidly aging population. The number of Canadians 65 years and older rose to 5.1 million in 2013 from 3.8 million in 2003.

Does this aging workforce benefit young Canadians?

It depends which young Canadians you ask. The employment rate for young high school graduates with a post-secondary certificate or diploma (from a trade school, for example) is 77.2 per cent compared to 71.8 per cent for university graduates, and their unemployment rates are 7.3 per cent and 9.1 per cent respectively. Among young Canadians with a graduate degree, the unemployment rate rises to 9.4 per cent.

The study found that many university graduates lack the skills necessary for available jobs in construction or the trades – a worrying trend for employers.

“A portion of university graduates are trained for jobs that are unavailable while employers are seeking workers for jobs where labour is scarce,” Cross said.

Because employers are reluctant to hire young people who lack the right skills, and are increasingly reluctant to provide in-house training, there’s a large gap between adult and youth unemployment in Canada.

Ottawa’s recent decision to tighten restrictions on the Temporary Foreign Worker Program will place added strain on the Canadian labour market.

“The Temporary Foreign Worker program has helped alleviate labour shortages in certain locations across Canada and in certain industries. But the new red tape and increased fees will likely discourage many employers from participating in the program,” Cross said.

Finally, on the wage front, tight labour markets in resource-rich provinces, such as Alberta, Saskatchewan, Newfoundland and Labrador, are driving up wages while the rest of the country has seen only modest wage gains.

Click here to download the report.

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