In June there were more than 800,000 job vacancies in Canada. And yet, Canada’s unemployment rate in July was still sitting at 7.5 per cent, significantly higher than before the COVID-19 pandemic.
Both the Liberals and the Conservatives have pledged ramped-up support for businesses struggling to attract new hires. Liberal Leader Justin Trudeau says his government, if re-elected, would extend the Canada Recovery Hiring Program to the end of March 2022 and give $3.2 billion to the provinces and territories to hire 7,500 new doctors, nurses and nurse practitioners.
Conservative Leader Erin O’Toole promises a “Canada Job Surge Plan” that would pay up to 50 per cent of the salary of new hires for six months after the end of the current federal wage subsidy. The party also wants to provide loans of up to $200,000 to small and medium-sized businesses in hospitality, retail and tourism, along with temporary rebates for dine-in restaurant meals.
On the campaign trail, Canada’s labour shortage is hardly one of the hottest topics of debate. But businesses and analysts are sounding the alarm about an issue some say could affect the speed of Canada’s economic recovery.
The shortages have been on full display this summer in Mont Tremblant, Que. Visitors flocking to the popular tourist resort were welcomed by signs warning of rolling restaurant closures, lines and longer-than-usual wait times.
“We have staff on-site that are there to answer questions and to also explain the situation, which allows people to understand a little bit more and be more patient,” says Cristina Romero, general manager of the Tremblant Resort Association.
The tourist village, which features a gondola, 75 shops and 1,900 lodging units and normally employs between 2,000 and 3,000 people depending on the season, is facing staff shortages that Romero puts “in the hundreds.”
The result is queues often snaking around the picturesque, Alpine-style resort even as many restaurants tables remain empty.
To beef up options for visitors, management has brought in food trucks, but Romero expects the shortages to continue to be a headache for some time.
As the fall colours attract another wave of guests, students who’ve been working summer jobs will be heading back to school, she notes.
“We do have some worries about being able to fulfill all the jobs.”
Why aren't Canadians filling the jobs?
The number of job vacancies across the country jumped by a staggering 22 per cent between May and June as the economy reopened, according to a recent report by RBC. Most of the unfilled positions are in food services, health care and the retail industry.
Geographically, Quebec and British Columbia are seeing the toughest job crunch, the analysis shows. That’s even though both provinces have unemployment rates above six per cent, higher than in the last three months of 2019.
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Some blame the shortage on federal COVID-19 income supports like the Canada Recovery Benefit (CRB). Small businesses are having a tough time recruiting part-time workers especially, Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), previously told Global News.
As economic activity ramped up through the summer, Ottawa has been scaling back the level of benefits provided, but the CRB still pays $300 a week pre-tax. That is twice as much the $150 someone would earn working 10 hours a week at $15 an hour, Kelly noted.
And while being available for work is a requirement for receiving the CRB, the rule is “poorly enforced,” according to Kelly. Ottawa has also proposed extending the benefit from Sept. 27 to Oct. 23 amid rising concern about the fourth wave of the pandemic driven by the spread of the Delta variant of COVID-19.
But while beefed-up unemployment benefits may be contributing to the shortage, several economists say its causes go well beyond government cheques.
Canada was already grappling with a labour shortage before the pandemic, says Pedro Antunes, chief economist at the Conference Board of Canada.
In 2019, the national unemployment rate had dropped to a record low of 5.7 per cent.
Jobless numbers, of course, soared at the onset of the pandemic, but as the economy started revving up once again, the labour force participation rate among young people went back up, Antunes notes.
But the country is missing a key source of labour this year, he adds: immigrants, temporary foreign workers and foreign students. New arrivals, which plummeted in 2020 amid border closures, have yet to come back up, Antunes notes.
The lack of foreign workers is hitting companies across the economy. In a recent survey of more than 500 small and medium-sized businesses, for example, consultancy KPMG found that more than two-thirds (68 per cent) of respondents were struggling to hire candidates with the right skills, with the shortage particularly acute when it comes to finding new employees with IT skills.
From digital storefronts to online signatures, the pandemic has forced countless companies to move much more of their business online. But employers are struggling to find the manpower to fuel that digital growth, says Armughan Ahmad, managing partner and president of KPMG Digital in Canada.
And while 90 per cent of companies surveyed said they are investing in re-training their own employees, that won’t be enough, according to Ahmad.
“They need to innovate and re-think their business models, which will also require access to global talent to fill highly specialized roles,” Ahmad said in a press release accompanying the survey results.
Another factor contributing to the labour shortage has to do with demographics, Antunes says. In the health-care sector, for example, the pandemic has prompted some baby boomers to pull the trigger on early retirement, he says.
In a recent survey of Canadians aged 18-64, job-search site Indeed Canada found that 35 per cent of respondents who were not employed said they were not looking for a job and not interested in doing so. But the data “primarily reflects the prevalence of people ages 55-64 who have exited the labour force and aren’t looking to return,” the report notes.
Yet another apparent cause of the dearth of workers is a structural shift in the labour market. Repeated, prolonged shutdowns, for example, caused many experienced workers in the food-service industry to seek employment in other sectors, Restaurants Canada has previously told Global News.
In British Columbia’s hospitality industry, 60 per cent of those who were no longer working in the sector as of June had voluntarily left their positions, according to RBC.
The pandemic may also have made some jobseekers choosier. Of the unemployed jobseekers surveyed by Indeed Canada who said they were looking for jobs but not urgently, 38 per cent had no post-secondary degree. Just 18 per cent of those who had completed college or university said the same.
While there is no lack of jobs with few educational requirements, “some of the respondents’ belief that work was not available could also reflect dissatisfaction about job quality, especially if some job openings offer low pay, limited flexibility, or little opportunity for advancement,” the report notes.
“Employers struggling to fill vacancies might be able to attract more non-urgent job seekers by boosting pay and benefits.”
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