How can we have both high unemployment and a labour shortage?

I have reported in earlier columns that the longstanding competitiveness gap between Canada and the U.S. had accelerated, with American productivity growing more than three times faster in 2010.

I have reported in earlier columns that the longstanding competitiveness gap between Canada and the U.S. had accelerated, with American productivity growing more than three times faster in 2010.

Tavia Grant’s Feb. 22 Globe and Mail report headlined In the Electro-Motive shutdown, an unsettling message for Canadian industry examined the devastating impact of subsidiary Electro-Motive’s decision close its London plant and move the jobs to Indiana, throwing some 700 employees out work and impacting at least a thousand more who provided materials and services to the plant.

This is the latest, and possibly the most wrenching, of south-western Ontario plant closures which included Ford Motor Company’s St. Thomas plant last year.

Meanwhile on Feb. 6, the Canadian Chamber of Commerce (CCC) issued a report entitled Top 10 Barriers to Competitiveness that highlighted a “desperate labour shortage” as the number one obstacle to growth of Canadian companies.

How can manufacturing layoffs and an unemployment rate of more than 8 per cent in six provinces including Ontario and Quebec be reconciled with the chamber’s “desperate labour shortage”?

The body of the report reveals that, rather than an overall shortage of workers, the real problem is “Canada’s skills crisis.”

In that context, the re-training of laid-off workers from shrinking industries such as manufacturing for work in fast-growing ones is one key to helping resolve the skills crisis.

The CCC’s report’s key theme is “a more highly skilled workforce will produce value-added goods and services and new technologies that can maximize productivity and improve the quality of life for all Canadians.”

And given existing skills shortfalls, combined with the pending retirement of skilled workers, the mindset of Canadian business and government should be to view every person as an opportunity to contribute to the workforce.

In that vein, improving immigrant integration services should be high priority. Many immigrants gain entry to Canada on the basis of needed skills yet languish in low skill jobs due to the lack of national standards for assessing educational qualifications, career counselling and mentorship.

Another way of reducing skills shortages is to break the barriers that prevent trained workers from working at their highest skill level.

Examples of recent progress include allowing nurse practitioners to offload some the work of over-stretched doctors, enabling pharmacists to write prescriptions and certified technologists to handle some aspects of engineering work.

Perhaps the biggest challenge, and the biggest opportunity, lies in what the report calls “connecting education and employment.”

Chamber President Perrin Beatty told reporters: “We want to encourage people to look more at science, engineering, the skilled trades . . . all of those areas are high growth.”

Human Resources and Skills Development Canada cites national labour shortages in virtually all areas of health care, the oil and gas sector and information technology, while manufacturing and low-skilled service occupations are among those in long-term surplus supply.

Last year, the Information and Communications Technology Council warned of an “alarming” shortfall in meeting forecasted Canadian ICT sector demand of 106,000 new employee’s in the 2011-2016 period.

With such clear evidence on the importance of turning out more graduates with the skills required for the economic future of our country, one would think that the CCC reports’ priority of connecting education with employment would be embraced by our universities.

Sadly, the opposite is true.

OECD data shows that, while Canada has one of the world’s highest rates of university attendance, our universities ranked second worst in turning out graduates able to find “high skill level” employment. Meanwhile each year, thousands of applicants with strong academic records are turned away from engineering, medicine and other skills-short fields due to “lack of capacity”.

Given the sclerotic inertia of faculty unions that compels our taxpayer-funded universities to ignore both the needs of our country and the future of their students, the only practical solution is for provincial governments to force reallocation of program dollars to where the jobs are.

The CCC report is both a wake-up call and a clear headed road-map to maintaining our privileged living standards in a competitive world.

In the words of Perrin Beatty: “The need for action is urgent . . . The stakes have never been higher”.

Gwyn Morgan is a Canadian business leader and director of two global corporations.

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