Good afternoon. My name is Tracey Leesti, and I'm director of the labour statistics division at Statistics Canada. I'm joined by Josée Bégin, director for the centre for education statistics; Marc Lachance, assistant director, labour statistics division; and Kathryn McMullen, chief of education matters and integrated analysis at Statistics Canada.
We'd like to thank the committee for the opportunity to speak to you today about the data relevant for your studies on labour shortages in high-demand occupations and understanding labour shortages.
While at Statistics Canada we do not generally calculate current or future occupational labour shortages—that work is usually left to external analysts, including provincial and federal governments—we are the primary data provider of key data sources on the Canadian labour market that can be used to assess labour market conditions, as well as observe certain aspects of supply and demand.
Data on employment, unemployment, wages, and job vacancies can be evaluated to assess the existence of, or potential for, a shortage, as well as to corroborate anecdotal reports of employers' difficulties in filling jobs. Data on enrolment and graduation can also identify a potential source for filling unmet demand.
There are a number of data sources available at Statistics Canada. The monthly labour force survey produces timely information about employment, unemployment, labour force participation, wages, as well as demographic information. The monthly survey of employment, payrolls and hours provides detailed industry and earnings information for payroll employees. There's also new data on job vacancies, as well as data on enrolment and graduation.
A picture of the labour market over time allows for an evaluation of changes in demand and supply for a particular occupation. In the first graph you will see that relative to total employment in Canada, employment in professional, scientific, and technical services and in health care and social assistance has shown long-term, steady growth, even during the recession, indicating a likely rise in the demand for these occupations.
As well, in mining, quarrying, and oil and gas, following a decline in the labour market during the recent downturn, this industry has been expanding again, and employment is back to its pre-recession level. This recent growth in employment again signals labour demand within this industry.
The next slide looks at job vacancy. The number of unfilled vacancies provides another potential measure of unmet labour. This measure....
Sorry?
A voice: There's a question.
:
This type of data on job vacancies will also provide important information on the relationship between the number of vacancies and unemployment. For example, an increase in the number of vacancies at the same time as an increase in unemployment—or even if unemployment remains flat—could reflect a mismatch due to structural factors.
The next slide shows vacancy rates, the unmet demand, by provinces and territories. As you can see, both Alberta and Saskatchewan had the highest vacancy rate of 2.6%, while the eastern provinces posted the lowest vacancy rates as of September 2011.
Now that we've looked at the demand side, we can turn to the next slide and look at the supply side. A low unemployment rate for a specific occupation may be an indicator of tight labour supply. In this graph we present the unemployment rate by occupation groups at the national level. The graph shows that health-related occupations have the lowest unemployment rate at 0.9% and 1.9% for the first two categories on the graph in red. They're well below the national rate of 7.4%, potentially indicating a short supply of labour in these occupations.
Also of potential interest are the natural and applied sciences and related occupations, as well as transport and equipment operators. Again both bars are in red, and you can see that they're below the national average in unemployment.
At the other end of the spectrum, lower-skilled labourers and trade helpers have had the highest unemployment rates at around 12%. One must remember, however, that not all workers in one occupation can fill all the jobs in the group. For example, a shortage of nurses cannot be filled by other workers in the health sector. Another reason why there can be higher unemployment is related to the location of the supply and demand.
Turning to the next slide, we look at unemployment rates for selected occupation groups across provinces. In this graph, among the occupation groups of interest for this committee we see that the unemployment rate was lower for the higher-skilled occupations in natural and applied sciences, as well as in health in all provinces. They were lower and relatively even across the provinces.
On the other hand, while the unemployment rate was also low for occupations in the primary industry and processing, manufacturing, and utilities in the prairie provinces and Alberta, it was higher in all other provinces, indicating there may be potential supply in other areas of the country. The LFS data are also available by economic region, which could also identify regional differences within each province.
Now that we've covered some of the indicators of labour demand and supply, we'll focus on some of the characteristics of potential labour supply, namely graduates and immigrants.
I will pass the presentation over to Josée.
The chart on slide 7 shows the total number of university graduates in Canada, by field of study, in 1992 and 2008. Fields of study are ranked by the total number of graduates in 2008. The top two fields of study in both 1992 and 2008 were business administration, management and public administration and the social and behavioural sciences and law.
Ranked at or near the bottom in terms of number of graduates in both years were mathematics, computer and information sciences and the physical and life sciences. Health-related fields of study and to a somewhat lesser extent, architecture and engineering, saw relatively large increases in the number of graduates between 1992 and 2008.
That being said, data for 2000, not shown in the chart, show that in the case of mathematics, computer and information sciences, the number of graduates stood at 6,000, a number that was much higher than in both 1992 and 2008. That was a reflection of the very high demand for workers in the high tech sector in the early 2000s. The number of graduates in that field then dropped off sharply in 2008, following the high tech bubble burst in the early 2000s, likely having an impact on the field of study choices made by students first entering university in 2003/2004.
Women accounted for 56% of those who graduated from university in 1992; by 2008, the female share had risen to over 60%. Women also increased their share of graduates from less than 50% in 1992 to over 50% in 2008 in physical and life sciences, and technologies, and agriculture, natural resources and conservation.
In fact, women have increased their share of university graduates such that, in 2007, they accounted for more than half of graduates in all fields of study, except for three: architecture and engineering; mathematics and computer sciences; and personal, protective and transportation services.
Let’s look at slide 8 now. The following chart presents the proportion of employed university graduates in low- to moderate-skill jobs. By low- to moderate-skill jobs, we refer to those classified as occupations that usually require secondary school and/or occupation-specific training as well as those where on-the-job training is usually provided.
This chart indicates that the proportion of university graduates employed in low- or moderate-skilled jobs—termed underutilization—has increased in the past two decades.
That being said, it is important to note that the rate of underutilization for Canadian-born graduates remains essentially unchanged: the increase in underutilization is almost entirely an immigrant phenomenon. This corresponds to an increasing earnings gap between Canadian-born and immigrant graduates. Not shown is that there is also an underutilization gap for women, but it is small compared to that for immigrants and shows no clear trend.
There you go.
:
Thank you very much for the opportunity to meet with you. I thought it would be useful for me to share with you some comments as we look at the skills gap stuff. Maybe I can turn a few lights on for those of you who are preparing what sound to be two very interesting documents.
When we think about the labour market, some carry an image of a barbell—two weights on the end of a thinner pipe. The one end is manual services, the middle is sort of the routine medium skills, and the ball at the other end represents the abstract high skills. If that's the way the labour market looks, and some would say that it's close enough, you can begin to probe those terms—manual services, routine skills, and abstract—and concern yourself with what needs to be there and what the skills actually translate into. Certainly formal education is needed less for the manual services. More is needed for the routine, and it's almost a necessity for the abstract, high-skill jobs.
The people who work in what's called STEM—science, technology, engineering, and mathematics—are found in the abstract block. Of course, this isn't a static picture. People move around. People move from the manual services to routine, and from routine to abstract. Indeed, as StatsCan's nice chart shows, people also move from what might be viewed as abstract high skills into medium skills and they are underutilized.
Another way of looking at it is a slightly more complicated view. It says that every job or occupation is made up of two characteristics: the knowledge work and the service work. What combinations might there be? You think of a fast-food worker as someone whose service component is high. The knowledge and subject matter specialization may be relatively low. A production worker in a plant, on the other hand, may have fair knowledge or medium knowledge of what he or she is doing, but the service emphasis—the interactions with other people, with customers—is less.
When you move out further, on to the high knowledge workers, you find some, again, who don't have a very large service component. These are people such as R and D engineers and research scientists. You have another group that relies, in a sense, on that combination of service and knowledge. A simple example you see running around town are Nerds on Site. They fix people's personal computers on a regular basis, which combines a service element with high-tech knowledge. There's a whole bunch of higher-tech jobs that are combinations of those two, such as consultant, sales engineer, and software application tech support. All of these require the ability to interact with people as well as a knowledge base that is crucial for what they're doing.
Let's talk about the services jobs very quickly. Some are low wage. There is little formal education and a short on-the-job training period. The interaction between customer and worker is important, and literacy is important. Literacy supports training and communication in that group. Park those thoughts, because we're going to come back to that in a moment.
The policy thrust you'd like to emphasize for low-skill jobs would include high school education and literacy at or above level three. You may want to think about increasing the minimum wage so that people who are working in those areas have the time and resources to take some further training. You might also encourage employers to offer training during working hours.
For the knowledge workers it's a little different. They need more formal education. They need some communication skills with clients and with other employees. But for that group, your policy is really for the post-secondary education system, including graduate school, initially, training during working hours, reducing immigration backlog in high-demand areas, if you, again, have shortages in that area that you want to do something about.
If you take one step back and ask what it is you're trying to do, I think the aspiration that would be shared by all parties and by all Canadians would be that we want to realize a high-wage workforce. In some sense, we want the results of our overall workforce to have a compensation that is as high as can be obtained in reflecting their various skills. You're going to get that if you move towards full employment.
You should encourage wage increases rather than discourage them. We should try to strengthen some of the institutions that support the way in which labour markets work, particularly the minimum wage system. We should move towards a living wage with indexing. We should be encouraging unions to form and to participate in wage-setting, training, and other conditions of work. Those kinds of approaches will give you that high-wage workforce.
I have a couple of quick comments on the workplace. I know my time is tight. In workplace training, consider a grant-levy system to fund the training of employees. Courses could be in-house or through outside suppliers. Participation requires that training take place during the workday. This is something that came out of the advisory group on working time and distribution of work, where we found that it was key for women particularly, but also for men, who have obligations outside of the workplace and work time, to be able to take their training in normal hours. The notion that you're going to study nights for your job may sound great unless the two of you are raising five kids and trying to get them all into bed.
Apprenticeship programs, a more formalized way of workplace training, can be encouraged, broadened in many occupations. We don't do well there relative to other countries, other than the U.S., which doesn't do very well at all. The co-op programs are useful for those in university, by giving them the opportunity to combine work and education in what they do.
So what should government do? Well, it can certainly help people move permanently or on a temporary basis to tight areas. What should government do about so-called shortages? It can help people move from surplus areas. It can certify skills that will make people able to recognize potential employees who have the necessary skills. Information about the job market is always helpful. Infrastructure is important for doing that, the systems for keeping track of openings.
Sometimes you have to ask, what should government not do? In essence, the one thing we don't want them to do is to avoid a macro response. If wages improve, if people start moving around and saying we have to slow this all down through restrictive fiscal and monetary policy, that would be a mistake.
Employers have a real role to play. They're the ones who are employing these people. They're the ones who are screaming about shortages. They're the ones who are saying government should provide work-ready employees. Well, first off, you should question that. It's not clear that that's the role of the education system or the governments.
On their actions on their own behalf, they could help raise wages if you're having shortages. Recruit more broadly. Provide flexible schedules. Upgrade the skills of your existing workers. Improve productivity. Restore internal career ladders that have, by and large, disappeared in most organizations. Workers and unions can also help. They certainly encourage skill certification, mobility as needed, workplace training participation. Developing literacy levels at every opportunity should be another thing you undertake.
The final message is, don't panic about shortages. Some local labour markets are tight. You've seen some interesting new data now from the vacancy survey. We say something is tight when it's 4% or 7% of the vacancy rate to the total employee base. That's not a terribly difficult issue. If we look at vacancies relative to the unemployed, what we find is that there are many more unemployed than there are vacancies in all industries and in all regions.
Mobility, postponement of projects, and we talked about how higher wages, training, and higher productivity can all help.
You should also realize that the source population in Canada will continue to expand, and those are the people who are 15 years and older. The labour force will continue to expand as new entrants in numbers exceed those who are retiring, leaving, or dying. The labour force participation rate, depending on how you measure it, for the total labour force is going to be declining. If you look at only the 15 to 64 age group, it will continue to rise. Indeed, if you look at every age-sex group, participation rates are rising, and rising out through 2025, 2030, and 2035.
What happens, though, is that you have a weighting issue in which the elderly, in significant numbers, are retiring and bringing down the overall participation rate, even though the elderly participation rates are rising from very low levels.
Let me wrap up, then, by simply saying that I think focusing on the skills rather than on the occupations is an important thing. I think you have to take a long-term view. You heard about a signal being given on the computing side, for example, which transmits to people deciding what career choice to make four, five, or six years earlier, and by not making a choice to go into that field now, it leads up to low numbers four or five years later. So these are lags, and they aren't the kind of thing you run out and fix before the next election. Well, maybe in the next election we could do some work, but you're not going to fix it in the next month.
So take the time, think about what you want to do, and think about the kind of society you want to live in.
Thank you.
:
Yes. I think if you look at the national view, the participation rate is the fraction of the people who are over 15 and want to work, are looking for work, or are working. The labour force is rising for those who are 15 to 64.
Even for those 15 and over, although the participation rate in aggregate is coming down somewhat, the total labour force continues to expand. There are new bodies—in other words, net—entering into the labour force. This is with some immigration going on. It's sort of the base level we have at the current time, but not extraordinary means of running out and hiring temporary workers and going down that road.
When you start looking at a particular area, however, you have to contend with the issue of mobility of people outside that area, people leaving. There are certain parts of this country that have declining population. If they had a problem trying to find skills, etc., they may be doing that off a smaller base. Unfortunately, of course, what happens when people move is that they often take their jobs with them or are unemployed. Hence you're not, in some sense, losing anything.
We have some very low unemployment communities in Canada, but that's because a lot of the labour force is gone and employment has declined. You're sort of saying that you're not learning the right thing from looking at this unemployment rate for this region.
I would be an optimist, though, in terms of what we can do. Keep in mind that every year, thousands of people move from one part of Canada to another. There's more migration, as we would call it, back and forth from one province to another than there is total net immigration of people from abroad. If you're concerned about getting your labour market to function well in a particular area, then you should be looking at the much broader picture.
For example, Nova Scotia at the moment is trying to increase the number of immigrants. It has a department to do that. I said rather cynically one day that they had more people in the department that they had immigrants. There's a lot of movement of people in migration from the rest of Canada—some going home, some going there to retire, some going there to work with particular skills. You'll see a big jump in that as people go to work in Nova Scotia for the shipbuilding exercises as they get under way.
Just think of that as a fluid exercise. It's awfully easy to fall into the trap of just thinking that these are all sort of fixed containers. You really ought to be thinking of them as a pool. You have coloured water that you pour in one spot, and you pour another colour in here, and you just watch it, and things start moving around and eventually the whole thing is grey.
:
Sure. The one reason you forecast is to get a lead time and to anticipate what you can do.
The secret there is to recognize that the very first thing is that the future is not forecastable. None of us know what will be the demand for anything 10 years or 20 years from now. But what you can do is lay out a set of assumptions and look at what we call alternative scenarios.
For example, we supported the construction industry for one of their advisory councils to HRSDC and generated four scenarios of how the construction industry might go ahead over the next decade. That was done about five years ago. That provided the backdrop for them as they began looking at what policies they might pursue to improve labour markets in those areas.
As they came up with an idea, let's say to expand the apprenticeship program, they asked how well that would work under all four scenarios. We asked them if there were some things they could do that are what we call robust, that work under almost anything you can imagine, or if there are some things very particular and very peculiar, and to understand that difference. They were asked to see whether, as time goes on, they could pick up which of these scenarios they thought was the one that's actually going to evolve.
It is, I think, possible to do a lot. It does require the statistical base to develop these models. Fortunately, we have that with Statistics Canada. Certainly, though, in this case, in this field, perhaps most complicated of all, it requires the interaction between employers, economists, government planners, and the education system, all of whom have their own ways of looking at things and their own ways of defining things. So it represents a real challenge for you.
:
So all that in two minutes?
I, too, am an immigrant to this country. I feel immigration should have, and has had, a role in Canada's development, not so much in filling skill shortages as in making Canada a more diverse society. Immigrants contribute to our trade relationships with different parts of the world, and they can contribute as employees, whether or not they have credentials.
If you have an immigration policy, as we do in Canada, that is high on trying to get the best of the world to come here, then you'd better know what you're getting, and this has a lot to do with the certification exercise. If you want to be running your immigration policy on the basis of education, then it ought to be that you have someone, usually whom you trust, whether abroad or in Canada, to certify those degrees.
The skills are a little trickier, because they include things like the ability to work with people, to work on a team, and those are a little tougher to measure, period, for anyone, whether you are a Canadian, new or old, or an immigrant. It also may be culturally determined, so that is another factor to keep in mind.
As to the number of jobs, if you have roughly 250,000 immigrants a year, and half of those go into the labour force, you're looking at an increase in the labour force each year of 125,000 to 130,000 for as long as your immigration rate holds. Will they all get employed? That's a little trickier question. It will depend on whether you're able to get a full-employment society where anyone who comes in can be assured of a job.
:
Thank you very much. I do appreciate being invited to come and speak to you.
As indicated, my name is Marie Carter. I'm actually this week the interim chief executive officer, so I'm wearing two hats at the moment.
Engineers Canada is the national body that represents the 12 regulators of engineering in Canada. We represent more than 250,000 licensed engineers in the country.
At Engineers Canada we're aware, very aware, of the current and future labour shortages in engineering. In 2009 we carried out a labour market conditions report, which annually we update, and many of our engineering labour markets are characterized at the moment by a surplus of recent graduates with little or no experience but a shortage of people with five to ten years of experience. Those people who have specialized, practical experience are in quite short supply right now in Canada.
A 2008 report from the Information and Communications Technology Council indicated that between 2008 and 2015, Canadian employers would be looking to recruit some 126,000 to 180,000 workers in the engineering and technology fields.
We're looking at an average of some 16,000 to just over 22,000 people per year, with the supply of our domestic graduates meeting only a half to two-thirds of that demand, depending on what discipline we're looking at. We know that new graduates aren't a substitute for the experienced engineers with the specialized technical skills.
For the civil, mechanical, electrical, and petroleum engineering labour markets, the report projects low excess supply all the way through to 2018 and probably beyond. With retirements as well, we're creating challenges in recruiting experienced engineers in many of these fields in later years.
For the industrial and manufacturing engineering labour market, the report further notes that chronic labour shortages are projected to 2018, given the current levels of immigration and post-secondary enrolments.
We do our own annual report, entitled Trends in Engineering Enrolment and Degrees Awarded. The most recent one reported on 2010, when we had a total of 11,450 undergraduate degrees in engineering. In that year, mechanical engineering remained the program in which the most undergraduate degrees were awarded, following by electrical, civil, and chemical. So the standard old engineering programs are the ones that are still attracting a majority of the students.
To attempt to address the shortage that's evident now and into the future, the engineering profession is undertaking several actions. First, we're looking to the under-represented groups in engineering—women and indigenous people—to ensure diversity in the profession and help fill the skills gap.
According to the 2006 census, although women comprised 47% of the total workforce, we comprised only 13% of the engineering workforce. In fact, from our most recent data on actual licensed engineers, we're about 10% of the licensed professional engineers in the country.
The plateau of females pursuing engineering contrasts with the rise of female participation in other previously male-dominated occupations, such as law and medicine. For example, in the 20-year period from 1986 to 2006, the proportion of women who were lawyers and doctors increased by almost 17% and about 13.5% respectively, whereas for engineers we increased by only 6%.
So we do have a big untapped resource there with women, and we know that we have a lot of room for incorporating indigenous people into the engineering profession.
We're setting targets. We're improving access to training programs for engineers and fostering greater flexibility in the delivery of the engineering curriculum.
Secondly, we're forming partnerships with national and provincial indigenous-focused organizations—there is a big drive in Alberta with our Alberta association on this—to develop tools to promote engineering to indigenous students, targeting outreach and support programs that run right from kindergarten to university, because clearly you need to be on the path to get the appropriate high school credits to get going in engineering, and to raise the interest.
We're working to raise industrial and government financial support for programs to assist indigenous students in engineering disciplines. Manitoba has a reasonable bridging program at the University of Manitoba for indigenous people, but this really does need to be more widespread in the country.
Finally, over the last 10 years, Engineers Canada and our constituent associations have undertaken a number of projects to help ensure the timely integration of international engineering graduates into our profession and into the workforce. As a brief example, one of our current initiatives is the international engineering graduate road map, and that will be a comprehensive one-stop shop, essentially. It's a resource to ease the start of the international engineering graduate's navigation through the process of becoming licensed in Canada.
With support from HRSDC, we undertook a big project called “From Consideration to Integration”. One of the items that was identified as an issue was just the understanding from the immigrant's point of view of how our system in Canada works, so this project should really provide a lot more clarity from that perspective.
We've undertaken a lot of our projects in partnership with the federal government, not only with HRSDC but also with Citizenship and Immigration Canada, and we look forward to continuing that very successful working relationship.
From our perspective, we would strongly encourage the federal government and provincial and territorial governments to continue to focus on supporting strong science, technology, engineering, and mathematics education at all levels, with special emphasis on the under-represented groups, while also continuing to work with various professions to improve the foreign qualifications assessment and recognition process.
We know from our contacts in the regulated professions that we're probably leading in a lot of the initiatives in how far we've come with being able to recognize the foreign credentials, and also in making it easier for foreign-trained people to apply from offshore, to get the process started, and to understand what they need to do to get going.
From our perspective, we're quite proud of the work we're doing to address the current and future labour shortages in our profession.
Thank you very much. I'd be happy to answer questions.