Canada Kazutaka Mayuzumi Security, Trade and the Economy

Canada’s Looming Skills Shortage

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The Canadian labour market is about to face several transformations that will greatly affect itsstructure and strength. Many have focused on the effects of demographic changes due to the aging of the population and upcoming retirement of the baby boomers. However, according to Employment Minister Jason Kenney, more pressing is the looming shortage of skilled workers in specific sectors. The main sources for this challenge are the poor management of Canadian apprenticeship programs and the underutilization of skilled immigrants.

Canadian Apprenticeship Programs

For many of the industries facing skills shortages in the future, such as the mining and construction industry, extensive training is needed to perform the jobs. This training can only be obtained through apprenticeship programs. However, as Jason Kenney explains, Canada’s apprenticeship programs are not enjoying as much success as apprenticeship programs in other countries. Apprenticeship programs in countries such as Germany and the United Kingdom are designed to encourage youth coming straight out of high school to enroll and start their apprenticeship early. In contrast, Canadian apprenticeship programs are more geared towards adults, with only 7% of apprentices under the age of 20 and over 40% aged 30 or older. The lack of a program-facilitated transition discourages youth from entering these programs right out of high school results in labour shortages in industries dependent on them.

In addition, apprenticeship programs in Canada have been criticized for their lack of harmonization. Across the country, there are 13 different apprenticeship programs, each with its own specific rules and regulations. Greater harmonization of apprenticeship programs across the country would encourage apprentices to enroll, and make it easier for them to move across provinces to find work without being limited by many different regulations. In some trades there is also a lack of available workplaces because of rules regarding the ratio of apprentices to journey men and master tradesmen.

Underutilization of Skilled Immigrants

                While some cite the lack of workers obtaining the necessary skills, others argue that the skills are present in Canada’s vast immigrant population but are greatly unrecognized and underutilized by Canadian firms. Studies conducted in 2006 show that aggregate earnings losses as a result of immigrant skill underutilization could be as high as $11.37 billion, an increase from $4.8 billion in 1996. It is only in the past two decades that the Canadian government have developed policies to decrease the underutilization of skilled immigrants through immigrant service organizations and the introduction of career-bridging and mentorship programs.

Underutilized skilled workers are not limited to immigrants; they include Aboriginal peoples as well. With a population growth of 45% between 1996 and 2006, compared to 8% growth in non-Aboriginals, Aboriginals are becoming increasingly important to Canada’s labour market. The main problem inhibiting Aboriginals’ ability to enter the skilled workforce has been lower educational attainment. As the 2006 Census shows, 45% of Aboriginals don’t complete high school, and a further 25% only make it to high school graduation.

With the upcoming retirement of the baby boomer generation, the Canadian government must quickly find a way to fill the skills gap. By harmonizing the Canadian apprenticeship programs and offering better transitions from high school to these programs, the government will be able to attract more skilled youth to fill the looming skills shortage. In addition, providing encouragement and incentive for Aboriginals to attain the skills needed in the labour market will not only increase their living standards, but will help solve the issue of skills shortages in the near future.

Kazutaka Mayuzumi

Author

  • Kazutaka Miyuzumi

    Kazutaka Mayuzumi is currently a 4th year undergraduate student pursuing a double major in Economics and Human Resources/Industrial Relations at the University of Toronto. His main research interests include: economic policy and macroeconomics, financial economics, and financial market structure. His other interests include the causes, impacts and results of financial crises, in particular the 2008 Financial Crisis. After completing his undergraduate degree, he hopes to pursue his Masters degree in Economics and to work at a central bank or other type of financial institution. During his leisure time, he enjoys browsing the web and catching up on events occurring around the world.

Kazutaka Miyuzumi
Kazutaka Mayuzumi is currently a 4th year undergraduate student pursuing a double major in Economics and Human Resources/Industrial Relations at the University of Toronto. His main research interests include: economic policy and macroeconomics, financial economics, and financial market structure. His other interests include the causes, impacts and results of financial crises, in particular the 2008 Financial Crisis. After completing his undergraduate degree, he hopes to pursue his Masters degree in Economics and to work at a central bank or other type of financial institution. During his leisure time, he enjoys browsing the web and catching up on events occurring around the world.