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Disparities in the Canadian labour market are increasing

On the one hand are professions with a shortage of manpower; on the other hand the unemployed who are struggling to find a job. The phenomenon concerns economists who see it as a brake on growth, as revealed by the latest CIBC study. 

 

Although Stephen Harper recently described the shortage of skilled manpower as Canada’s “greatest challenge”, the stakes are actually higher. According to a study conducted by CIBC, the gaps are becoming greater on the labour market. Occupations in short supply include the health sector (doctors, nurses, dentists, optometrists, nutritionists, pharmacists, etc.) and natural resources (mining, oil and gas) as well as specialized manufacturing and business services.   Today, no less than 30% of companies report facing a shortage of skilled manpower, double the proportion seen in 2010. This is not surprising given that these industries represent 21% of total employment in Canada.

 

Geographical disparities

But while these companies are struggling to fill their positions, job seekers in more traditional industries (butchery, bakery, education, banking, etc.) remain unemployed. 250,000 of them have not found a new job for more than six months. This high mismatch in the labour market is more significant in Western Canada, however. The ratio of job vacancies compared to the unemployment rate is five times higher in Alberta than in Quebec. According to CIBC economists, there are many effects from this mismatch: reduction in the effectiveness of monetary policy, growth potential of the labour market and the economy.

 

Several solutions forthcoming

To bridge the gap, several solutions have been put forward, beginning with welcoming foreign skilled labour. Accordingly, the federal government has announced its intention to admit between 53,000 and 55,000 new arrivals in 2013. This is good news for economists but according to them it will not be enough to reverse the trend. To get there, it will also be necessary to focus on training young people in those trades with labour shortages as well as on redirection of more skilled workers. 

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