Academic Literature

Canada – Skills shortages have developed in certain fields and regions in recent years OECD finds

Skills shortages have developed in certain fields and regions in recent years. Earnings premiums for people in some professions, notably health, engineering and skilled trades have increased. And vacancy rates have risen for skilled trades, with the increase being particularly large in Alberta and Saskatchewan. While reforms have been implemented to strengthen adjustment so as to overcome these shortages, there is still room to go further by improving labour market information, increasing responsiveness of the education and training system to labour market demand, making the immigration system more reactive to current labour market conditions and reducing regulatory barriers to inter-provincial labour mobility.

Ontario and the Atlantic provinces have had the largest rises in earnings premiums at the post-secondary certificate/diploma level and the smallest declines at the university degree level (Table 1). In the Prairie provinces, the increase in the earnings premium for a post-secondary certificate/diploma was almost the lowest in Canada and the decrease for a university degree was the greatest, despite higher increases in real earnings for people with PSE credentials than elsewhere. This result reflects the fact that real earnings for people with a high-school credential rose far more than in the rest of the country. The large increases in real earnings at all levels of education attainment combined with small increases in earnings premiums suggests that the Prairie provinces have been more subject to across-the-board labour shortages than to skills shortages. And for interprovincial mobility incentives, it is real earnings differences that matter, not local skills premiums.

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Skilled-trade-vacancy rates have increased, especially in Western Canada

Job-vacancy data suggest that demand for skilled tradespersons has grown faster than supply during the current business cycle. Indeed, vacancy rates in the skilled trades now exceed those in science-based occupations (e.g. engineers) (Figure 5). Skilled-trade vacancy rates have increased more and are higher in Alberta and Saskatchewan than in the rest of the country.

A big part of the skills shortages in Alberta is in the construction sector for the energy industry. With resource projects getting underway in other parts of the country, such as LNG in British Columbia and oil and gas in the Atlantic Provinces, and further expansion of oil-sands projects to come, these shortages could become acute if promoters do not agree to phase development so that their demands for construction workers do not peak simultaneously.

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Recommendations to reduce skills shortages

  • Build on announced new measures to provide better information on expected returns to post-secondary education to improve students’ study choices.
  • Strengthen the single market for labour by making the Agreement on Internal Trade Dispute Resolution Panel more accessible and expediting its procedures. In addition, continue to work with provinces and territories to harmonise training and certification requirements of all apprenticeship programmes across the country to increase completion rates and inter-provincial mobility of apprentices.
  • If recent Employment-Insurance reforms do not clearly cut repeat use, adopt experience-rated premiums and enhance opportunities for seasonal workers to retrain.Other recommendations
  • Provide a deeper occupational and regional breakdown of vacancy and unemployment data to facilitate job matching and data on recruitment intensity to strengthen surveillance of job-matching efficiency.
  • Reduce the incidence of weak numeracy or literacy skills being a barrier to post-secondary education completion, perhaps by requiring students to study mathematics and English/French until the end of secondary school or by investing in remedial education in post-secondary education institutions.
  • Increase experiential-learning components of university programmes to develop the soft skills sought by employers.
  • Sustain programmes for immigrants to complement their foreign credentials and become qualified to local standards.

Chosen excerpts by Job Market Monitor. Read the whole story at  Overcoming Skills Shortages in Canada

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Discussion

3 thoughts on “Canada – Skills shortages have developed in certain fields and regions in recent years OECD finds

  1. Hello – The link to Overcoming Skills Shortages in Canada does not appear to be working. Could you please have it corrected? Is the OECD report this one: http://www.keepeek.com/Digital-Asset-Management/oecd/employment/employment-and-skills-strategies-in-canada_9789264209374-en#page1 ? Many thanks in advance.

    Posted by jhwordsmith | August 26, 2014, 12:46 am

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