Canada has one of the most highly educated populations in the world, leading the G7 for the share of working-age people with a college or university credential. And yet despite this impressive feat,a mismatch between skills that workers possess and skills in demand remains. In many sectors of our economy, employers are struggling with skills and labour shortages. Demographic shifts will only exacerbate this phenomenon – with over 600,000 retirement-driven job vacancies in the skilled trades expected between 2022 and 2031.
The Future Skills Centre and Conference Board of Canada estimated that skills shortages account for a 7 per cent gap in productivity between Canada and the United States since 2018. If Canada had adequately addressed its skill shortages, GDP would be an estimated $49 billion higher today. Government of Canada data shows that over the next six years, 56 occupational groups will face shortages, particularly in health, natural and applied sciences, and trade occupations.
Skills shortages are concentrated in particular regions and sectors. Overall, across Canada, the mining, utilities, construction, manufacturing and agriculture sectors face shortages that have broad implications for the transition to the low-carbon economy. For example, Ontario is facing a particularly acute shortage of skilled workers in the mining industry — a shortfall of potentially 3,500 by 2040 — which could hold back the province’s ability to unlock its wealth of critical minerals that would help power its nascent electric vehicle (EV) sector and contribute to increasing demand in global clean energy supply chains. In Alberta, a recent government report shows the construction sector has one of the highest vacancy rates at 4.8%. This hampers the ongoing effort to address the housing crisis and retrofit buildings to achieve greater energy efficiency and reduced GHG emissions.
The skills shortages of today are projected to become worse if no action is taken. The Labour Market Information Council has presented detailed data about Canada's aging workforce. Mature workers (defined as those 55 years old or older) now constitute one fifth, or 20 percent, of the workforce, compared to only one in eight workers back in 2003. As noted by the Business Council of Alberta, a surplus of job vacancies has economic consequences including delayed or cancelled projects, longer project timelines, missed investment opportunities, and higher business costs, often passed on to consumers. To keep consumer good costs low and Canadian industries competitive in a time of potential tariffs, we must do what we can to keep our domestic industries healthy and competitive by addressing the mismatch between labour and skills supply and demand.
Time for a new, improved, clean energy workforce development approach
There are various explanations for how Canada arrived at this fraught moment. Yet there is almost no doubt about what will help us rise to the challenge: workforce development. It's time to invest in solutions that help get workers ready for the clean energy opportunities that lie ahead – and to recruit, train, and retain workers – so we achieve better alignment between skills and jobs. We especially need more apprentices and journeypersons power the low-carbon economy.
Unfortunately, the federal government, while taking steps forward such as introducing the Sustainable Jobs Training Fund, has also taken steps backwards. Budget 2024 cut $625 million in labour market transfers to the provinces, rolling back skills and employment training funding to pre-2017 levels. Bringing back this funding would be a vital step in ensuring that provinces can bolster their workforces and meet the needs of their economies.
As the Pembina Institute noted in an open letter to the Minister of Employment and Social Development Canada last fall: “Workers are navigating the uncertainty and hardships caused by inflation, housing market constraints, and structural shifts in keystone industries stemming from changes in technology and world markets.” Since that open letter, workers have had to consider a new threat: punitive tariffs from Canada’s closest trading partner. Yet there is hope on the horizon. If Canada makes the necessary investment in the workforce development now, workers will be well positioned to take advantage of the trillions of dollars of global investment that is directed toward the energy transition.
It’s time for an investment in the new skills that will position Canadian workers to take advantage of opportunities in the new energy economy.
