Canada’s labour market must overcome significant challenges if it is to contribute to economic growth, but one field that could provide the biggest bang for the buck is information and communications technology (ICT).
It’s been six years and counting since the onset of the financial crisis, leading many economists and financial markets participants to believe the Western world is trapped in a “new normal” of slower economic growth.
The recovery has been slow and the labour market is one area needing significant improvement. It has become harder to find the right job, and the quality of jobs itself has eroded. Without knowing if and when the economy is going to get back on track, firms are less certain about hiring.
And the right kind of job creation hasn’t been taking place. Bank of Canada senior deputy governor Carolyn Wilkins laid out in a Feb. 10 speech the issues plaguing the labour market.
She pointed to the participation rate of prime-age workers (aged 25-54) in the labour force falling substantially in 2014. Also, “More than one in four people who have part-time jobs would prefer to work full-time,” Wilkins said.
Wilkins pointed out that prime-age and young workers remain underemployed, while the labour gap (excess capacity in the labour market) was about 270,000 jobs at the end of 2014.
But Canada is poised to do relatively better (along with the U.S.) as compared to Japan and Europe when it comes to ramping up economic growth. One reason for this, suggested by Philip Cross, a researcher at the Fraser Institute, is that Canada has one of the youngest and best-educated populations in the developed world.
In the report “Is Slow Growth the New Normal for Canada?“ published March 10, Cross writes, ”The populations of Canada and the United States are younger because of a higher birth rate and more immigration than in Japan and the European Union, and so the potential drag from demographics is lower in North America.”
That potential drag is what proponents of the “new normal” say comes from an aging labour force.
So there is reason for Canada to be optimistic, but there is much work to be done.
Focus on ICT
Developing a more technology-savvy workforce is essential for Canada to improve economic growth.
On Monday, March 16, the Information and Communications Technology Council (ICTC) released its “Labour Market Outlook“ for 2015 to 2019. The ICTC is a leading national centre of expertise conducting research, developing policy, and creating talent solutions for the digital economy. It was formed in 1993.
It determined that cumulative hiring requirements in Canada for ICT talent are expected to be over 182,000 by 2019. Also, a 1 percent increase in labour productivity through adoption of advanced technologies would yield $8 billion (about 0.4 percent of GDP) to the Canadian economy.
