Little evidence of labour shortages, skills mismatch

Canada is not experiencing significant job or skills shortages, says a new report from the country’s budget watchdog that also takes a shot at a recent government analysis pointing to a growing problem.

OTTAWA — Canada is not experiencing significant job or skills shortages, says a new report from the country’s budget watchdog that also takes a shot at a recent government analysis pointing to a growing problem.

The findings by parliamentary budget officer Jean-Denis Frechette appear to once again put the office on a collision course with the Harper government, which had a series of public spats with predecessor Kevin Page.

A spokesperson for Employment Minister Jason Kenney insisted there was no disagreement between the government and the PBO on labour shortages, however.

“This report is consistent with what we have been saying, that while there is no national labour shortage, there are regional- and sector-specific skills shortages, which employers have been saying for some time,” said Alexandra Fortier, Kenney’s press secretary.

Still, some industry groups said they were contacted by Kenney’s office to counteract the overriding message of the PBO report.

Sean Reid of the Progressive Contractors Association of Canada, one group that was contacted, said his members in the resource sector face real and acute shortages in a number of job skills, including welders, electricians, plumbers, carpenters and heavy equipment operators.

Michael Atkinson of the Canadian Construction Association added that by 2023, there will be a need for an additional 300,000 workers in his industry mostly because many current workers will have retired.

The PBO under Frechette, who took charge of the office in September, has been more circumspect in his disagreements with government economic positions, but Tuesday’s report makes clear he does not agree with how the government has characterized the skills issue.

While trumpeting their job-creation record, federal ministers have repeatedly narrowed in on industry complaints about labour shortages as a serious economic challenge both for today and the future.

In 2013, Ottawa introduced the controversial Canada Jobs Grant against provincial objections to address the problem. Provinces eventually agreed to enact the program only after it was watered down, and Quebec has backed out altogether.

But the PBO report suggests the problem has been exaggerated.

“There is little evidence to suggest a national labour shortage exists in Canada, although there appears to be regional and sectoral pockets of labour market tightness,” the PBO said in a 33-page report that examines the various trackings of job vacancies, including those from business groups.

“Further, there does not appear to be a more acute national skills mismatch in Canada than prior to the 2008-09 recession, although there may be exceptions in some regions and sectors.”

The report is particularly critical of the Finance Department’s “Jobs Report” issued in February that stated the vacancy rate, which tracks unfilled job openings, is rising and will get worse as baby boomers retire.

The PBO openly questioned the government’s methodology, particularly comparing present day vacancy rates to 2009, when the economy was deep in recession. Rather, the government should have compared job vacancies to a similar point in the business cycle, the PBO analysis said.

Another problem, said Frechette, is that the Finance Department made use of data that has since been revised downward. He said the PBO only learned of the revisions late Monday.

“We expect they would probably review their report, but it’s up to them,” he said. Finance did not immediately respond to a request for comment.

The PBO said while there appeared to be no national problem, there were pockets of labour “tightness” in some sectors and regions, particularly Saskatchewan, where the unemployment rate dipped to 3.9 per cent in February. Surprisingly, the PBO did not include Alberta as a region of labour tightness.

That’s also been the view of most economists, and conforms to the Bank of Canada’s quarterly business surveys that have tended to present the problem as isolated.

“No question that we should be encouraging training, and individuals to upgrade their skills,” said Bank of Montreal chief economist Doug Porter, a long-time skeptic on the issue.

“But the so-called ’workers without jobs; jobs without workers’ issue seems to skew much more heavily to the ’workers without jobs’ part of the equation.”

Following question period in Parliament, NDP Leader Thomas Mulcair and Liberal critic Scott Brison said the government had erred in trying to take away responsibility for job training from the provinces, noting the regional disparities in the job market.

The PBO’s overall assessment is of a labour market that has made some strides in recovery from the 2008-09 recession, but still has a way to go before it should be considered healthy or representing full employment.

Almost five years removed from the recession, unemployment is higher than pre-slump, weekly hours worked are lower, participate rates are lower, and wage growth across almost all industries and regions is slower than before the slump.

If there were serious labour shortages, you would expect to see a spike in wages in some sectors and regions, said Mostafa Askari, the PBO director general, and that has yet to happen.

Further, the report notes any wage growth has been mostly among top earners, adding to income inequality.

The report adds that particularly among young workers, there is indeed a skills mismatch: young workers are often overqualified for the jobs they have managed to land.

The report also suggests that the government’s controversial foreign workers program has succeeded in bringing down the vacancy rate.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Lyn Radford, 2019 Canada Winter Games board chair, was named 2020 Sport Event Volunteer of the Year at the Prestige Awards. (File photo by Advocate staff)
WATCH: Lyn Radford wins award for volunteer efforts

The board chair of the 2019 Canada Winter Games in Red Deer… Continue reading

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Red Deer dips below 300 active COVID-19 cases

The number of active COVID-19 cases in Red Deer continued to drop… Continue reading

A candlelight vigil will be held in Red Deer on Thursday to honour the 350-plus people killed in the Easter bombing attack in Sri Lanka. Contributed photo
Candlelight vigil planned for deaths linked to Olymel COVID-19 outbreak

A candlelight vigil is being planned for those who died due to… Continue reading

Red Deer Rebels forward Jaxsen Wiebe battles Calgary Hitmen forward Cael Zimmerman for a loose puck when the two teams squared off in February last season. (Photo by BYRON HACKETT/Advocate Staff)
Calgary Hitmen shutout Red Deer Rebels

Rebels name centre Jayden Grubbe team captain ahead of Friday’s game

Bryson, six, and Mara, eight, play with puppies from Dogs With Wings Saturday. (Photo by Sean McIntosh/Advocate staff)
WATCH: Dogs With Wings introduces Red Deer program

A program that trains puppies to be certified service, autism, facility and… Continue reading

Walter Gretzky father of hockey hall-of-famer Wayne Gretzky waves to fans as the Buffalo Sabres play against the Toronto Maple Leafs during third period NHL hockey action in Toronto on Tuesday, January 17, 2017. THE CANADIAN PRESS/Nathan Denette
Funeral for Walter Gretzky to be held Saturday in home town of Brantford, Ont.

The funeral for hockey legend Wayne Gretzky’s father Walter will take place… Continue reading

A sign for the Canadian Security Intelligence Service building is shown in Ottawa on May 14, 2013. A newly released audit report shows that difficulties with the judicial warrant process at Canada's spy agency — an issue that made headlines last summer — stretch back at least nine years. THE CANADIAN PRESS/Sean Kilpatrick
Spy warrant shortcomings stretch back almost a decade, newly released audit shows

OTTAWA — A newly released audit report shows that difficulties with the… Continue reading

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
No winning ticket for Friday night’s Lotto Max jackpot

TORONTO — No winning ticket was sold for the estimated $29 million… Continue reading

A trial countdown sign marks the days at George Floyd Square, March 4, 2021, in Minneapolis. Ten months after police officers brushed off George Floyd's moans for help on the street outside a south Minneapolis grocery, the square remains a makeshift memorial for Floyd who died at the hand of police making an arrest. The trial of former Minneapolis police officer Derek Chauvin will begin with jury selection on March 8. (AP Photo/Jim Mone)
Officer’s trial could reopen intersection where Floyd died

MINNEAPOLIS — During a group’s recent meeting at the now-vacant Speedway gas… Continue reading

FILE - In this Aug. 30, 2020 file photo Portland Police Chief Chuck Lovell calls for an end to violence in the city during a news conference a day after a demonstrator was shot and killed in downtown Portland. Amid protests following the police killing of George Floyd last year Portland dissolved a special police unit designed to focus on gun violence. Critics say the squad unfairly targeted Black people, but gun violence and homicides have since spiked in Oregon's largest city, and some say disbanding the 35-officer unit was a mistake. (Sean Meagher/The Oregonian via AP, File)
As violence surges, some question Portland axing police unit

PORTLAND, Ore. — Elmer Yarborough got a terrifying call from his sister:… Continue reading

Harley Hay
Harley Hay: Just don’t call it cod liver oil

Many people swear that a daily dose of various vitamins is an… Continue reading

Letter: Preserving green spaces in Red Deer

The Advocate published an article Feb. 11 about Sunnybrook residents concerned about… Continue reading

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Former Toronto Argonauts lineman Chris Schultz remembered as a gentle giant

Most Read