Canada’s Labour Shortage Has Reached the Point of a Perfect Storm

A server tends to customers at a restaurant in Old Montreal on July 18, 2021. The food service industry is just one of multiple sectors facing dire labour shortages. (The Canadian Press/Graham Hughes)

Commentary

Economic recovery from the pandemic is going to be a convoluted path with years of ups and downs. While inflation is making it difficult for an increasing number of Canadians to pay the bills, we are also ironically in the midst of a labour shortage. As employers increase employee compensation to draw new workers, they are forced to raise prices for products and services leading to even more inflationary spikes. These labour challenges won't be solved soon or easily.

Part of the problem we are facing is that we are playing catch-up. Many projects and initiatives that were considered non-essential in the last couple of years have been deferred. Whether in the public sector or the private sector, a lot of construction was put off as lockdowns were imposed. With backlogged capital projects being brought back online along with a suburban homebuilding boom, demand for construction labour has skyrocketed, with a 158 percent increase in job vacancies in the last quarter of 2021. Wages for those jobs increased by over 14 percent in that period as well, but it still hasn’t managed to draw in enough labour to meet demand.

Health-care services are swamped for a number of reasons. While the pandemic appears to be under control, a sizable number of COVID-19 patients are still being hospitalized. Backlogged surgical procedures are stretching resources thin as they rush to catch up with patients. Vaccine mandates remain in place in many health-care facilities, which reduces the pool of potential new hires. In B.C., nearly 2,500 health-care workers were fired for refusing vaccination despite the system being short-staffed. Health sector job vacancies are up in the 100 percent range in the last quarter of 2021 depending on the specialty.

An area of great concern is with social and community service workers, where job vacancies are up 159.8 percent. Social pressures due to pandemic lockdowns and a growing opioid addiction crisis has led to an explosive demand for social workers. Individuals and families are under stress and community supports are strained. Unfortunately, wages in this field have only risen by 1.7 percent over the period despite the increased demand.

The food service industry has been hit hard, as restaurants and bars were usually the first businesses to be shut down during lockdowns and the last to open up. The rollercoaster nature of the industry during that time has caused many workers within it to choose to take up new occupations. Job vacancies for servers are up 145 percent and kitchen support staff demand is up 119 percent, despite many restaurants and bars having closed permanently during the pandemic. Food service is a narrow margin industry, and providers have had a hard time trying to raise wages high enough to draw workers back to them.

Our aging population is a factor as well. While people over 65 made up 14.4 percent of the population in 2011, that number has since grown to 18.5 percent today. Not only does that take people out of our workforce as they retire, but it adds extra pressure to our health and care facilities as senior citizens tend to need more assisted living.

We won’t be able to turn the tide on this labour shortage quickly but we need to start taking measures to address it soon.

Many of the Canadians who have left the lower-skilled sectors of the workplace are in the midst of upgrading their workplace skills. Having had time to meditate on their career direction during lockdowns, many chose to change paths. We need to expedite training programs and education for these workers in transition. Particularly if they are taking training for the trades as we have a housing shortage. If we can increase our housing supply, we can take pressure off the cost of living and can accommodate new Canadians.

Immigration used to be the main means we used in order to fill the void left by our aging population. In the last two years, immigration has dropped due to the pandemic.

Yes, we need to increase immigration levels. Not just with temporary foreign workers, but with permanent new citizens for Canada. That will take some political courage as labour unions often oppose such efforts, but it has to be done. Many of the job openings we have can be quickly filled by new Canadians.

As with so many issues, the best solution government could offer is to get out of the way. Stop the rolling restrictions and try to stabilize the economy. Encourage immigration and education while cutting red tape and barriers to employment, including vaccine mandates. Fast-track housing construction and training in the trades. A streamlined government won’t draw as much labour, thus leaving more for other sectors.

We have hit a perfect storm of a labour shortage. There is no silver bullet solution. We need to start working on this issue sooner rather than later though, as the longer we wait the worse it will get.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.