JOBS REPORT: THE STATE OF THE CANADIAN LABOUR MARKET

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JOBS REPORT:

THE STATE OF THE

CANADIAN LABOUR M A R K E T

Department of Finance Minist?re des Finances

Canada

Canada

?Her Majesty the Queen in Right of Canada (2014) All rights reserved

All requests for permission to reproduce this document or any part thereof shall be addressed to the Department of Finance Canada.

For more information, please contact Service Canada at 1 800 O-Canada (1-800-622-6232) TTY: 1-800-926-9105

Cat. No.: F1-23/3-2014E ISBN: 978-1-100-23184-6

This document is also available on the Internet at fin.gc.ca

Cette publication est aussi disponible en fran?ais.

Jobs Report The State of the Canadian Labour Market

Table of Contents

Introduction ............................................................................................................3 Chapter 1 ? Recent Performance Of Canada's Labour Market.................................6 Chapter 2 ? Education, Skills, Mobility And Imbalances Between The Demand For And Supply Of Skills ....................................................21 Chapter 3 ? Future Labour Market Trends .............................................................35 Chapter 4 ? Setting The Right Conditions For A Dynamic Labour Market And The Creation Of High-Quality Jobs .........................................43 Conclusion............................................................................................................. 54

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Jobs Report The State of the Canadian Labour Market

Introduction

Canada's labour market has outperformed those of other Group of Seven (G-7) economies since 2006 with close to 1.6 million net new jobs created across the country (see chart below). The fundamental strength of the Canadian labour market has been particularly evident after the global recession. Despite the weak global economic environment, the Canadian economy has expanded at a faster pace than other G-7 economies and the labour market has been resilient, with over 1 million net new jobs created since the recovery began in July 2009. This represents the strongest labour market performance among all G-7 economies. Moreover, high-wage, high-skilled, full-time and private-sector employment has been the main source of job creation over the recovery.

Improvement in Employment Since 2006, G-7 Countries

per cent

12

10

9.8

8

7.8

6

4

3.5

2

1.6

1.5

0

-0.4

-2

-2.3

-4

Canada Germany United

France

United

Japan

Italy

Kingdom

States

Note: From January 2006 to January 2014 for Canada and the United States, December 2013 for Germany, Japan and Italy, and 2013Q3 for France and the United Kingdom.

Sources: Statistics Canada (Labour Force Survey); Haver Analytics, Inc.; European Central Bank (European System of Accounts); Germany Federal Statistical Office (Employment Accounts); Italy National Institute of Statistics (Labour Force Survey); Japan Ministry of Health, Labour and Welfare (Labour Force Survey); United Kingdom Office of National Statistics (Labour Force Survey); United States Bureau of Labor Statistics (Current Employment Statistics); Department of Finance calculations.

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However, challenges remain. Canada, along with other advanced economies, will be affected by large shifts in population composition, continued globalization and increased skill requirements resulting from technological advancements. Meeting these challenges will require a skilled, mobile and flexible labour force.

The purpose of this report is to provide an assessment of the current state of the Canadian labour market and its preparedness to meet these future challenges. The report examines recent developments in the labour market, the educational attainment and skill level of Canada's workforce, and potential imbalances between the demand for and supply of skills. The report concludes with a discussion of actions taken by the Government to establish an environment conducive to a dynamic labour market and the creation of high-quality jobs.

Canada has demonstrated a remarkable job creation record in recent years. Canada also fares well compared to other countries with regard to post-secondary educational attainment. Overall, Canada enjoys a fairly mobile population that responds well to economic opportunities and regional differences in labour market conditions. Meeting the challenges of tomorrow will require that Canada continue to build upon these strengths.

However, there are a number of areas that could be strengthened in light of the pressures facing the labour market. Despite significant labour mobility in Canada, Canadian firms are having more difficulty in hiring than the unemployment situation would normally warrant, with imbalances between unemployment and job vacancies persisting in certain regions and occupation groups. ? There is evidence of a misalignment between the skills of the unemployed and those required by

employers, with higher job vacancy rates in the skilled trades and science-based occupations. Indeed, there is a need to continue improving the process of matching Canadians with available jobs. ? A number of groups are not reaching their full potential in the labour market, including less-skilled individuals, recent immigrants, Aboriginal peoples, persons with disabilities and older Canadians. ? Proportionally fewer Canadians graduate with university degrees in high-demand fields such as science, mathematics and engineering than in many other OECD countries, and Canada appears to lag its peers in developing business skills. ? The number of apprentices completing training and obtaining certification has doubled from 2000 to 2011, but apprenticeship completion rates have averaged only 50 per cent over this period. The Government has taken a number of measures to strengthen Canada's labour market and establish an environment that fosters new investment, economic growth and job creation. Since 2006, it has substantially improved Canada's business tax competitiveness; expanded trade and opened up new markets; modernized Canada's infrastructure; supported research, innovation and the creation of large-scale venture capital funds; streamlined the review process for major economic projects; improved incentives to save and work; and strengthened Canada's retirement income system.

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Jobs Report The State of the Canadian Labour Market

In addition, the Government put in place a number of initiatives to more directly support the development of a skilled, mobile and inclusive workforce within an efficient labour market. It has introduced measures to better connect Canadians with available jobs that match their skills and ensured the Employment Insurance program is fair and supports unemployed Canadians when needed. The Government also took important steps to align training with the needs of the private sector. In addition, it has promoted postsecondary education and skills development and implemented targeted support for apprentices and the employers that hire them. The Government has also provided significant support to improve the labour market participation of under-represented groups. Finally, it has implemented a number of initiatives to help attract foreign skilled workers. These actions are contributing to the fact that Canada's economy has outperformed other G-7 countries in job creation over the past seven years. This report is structured as follows: ? Chapter 1 reviews the recent performance of the Canadian labour market. ? Chapter 2 assesses Canadians' education and skills levels and examines whether there are imbalances

between the demand for and supply of skills. ? Chapter 3 discusses key trends that will affect the Canadian labour market going forward. ? Chapter 4 discusses the conditions necessary to establish a high-performing, dynamic labour market

and the creation of high-quality jobs, and highlights what the Government has been doing to achieve this objective.

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