Canada Has A Historically Large Labour Shortage, But Job-Seekers Are Still Struggling

A record-high share of Canada’s small and mid-sized businesses are reporting they are being held back because of a skilled-labour shortage, but that doesn’t seem to be helping Canadians find work any faster.

The Business Barometer from the Canadian Federation of Independent Business (CFIB) for October found nearly 47 per cent of small and mid-sized businesses are being held back by a lack of skilled labour. That’s up from 39 per cent a year earlier.

“Business owners are finding it harder to fill vacant posts,” Ted Mallett, vice-president and chief economist at the CFIB, said in a statement.

“It’s definitely a headwind for the economy,” Mallett told HuffPost Canada. “The shortage means businesses feel they can’t produce and sell as much as they (otherwise) could.”

While the labour shortage is a clear sign that Canada’s job situation is very strong these days (the historically low 5.9-per-cent jobless rate being another sign), for many out-of-work Canadians this isn’t translating into better job prospects.

According to research released Wednesday by job site Indeed, the average length of time it takes to find a job in Canada is only a little shorter than it was during the height of the Great Recession a decade ago.

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“Despite fairly plentiful jobs, Canadians unlucky enough to get laid off often remain out of work for longer stretches than in previous strong labour markets,” economist Brendon Bernard wrote.

It takes, on average, four-and-a-half months to find a job in Canada today, a month longer than it did the last time the country’s economy was similarly strong, just before the Great Recession of 2008, Bernard found.

The duration of unemployment shot up during that recession, and has essentially stayed at elevated levels.

Some observers have suggested this is partly due to a skills mismatch in Canada’s economy. Job-seekers don’t have the skills employers are looking for, the argument goes, so they struggle to find work while jobs sit vacant.

But Bernard says it isn’t entirely clear whether that’s what’s happening; it may simply be that some regions in Canada are struggling to create jobs.

“We’ve seen some progress in provinces like Ontario and Quebec in gradually reducing the jobless (length), but in resource rich provinces unemployment duration shot up in the 2014 oil crisis and stayed high,” he told HuffPost Canada.

The major oil-producing provinces Alberta, Saskatchewan and Newfoundland used to be “the engines of our labour market,” Bernard noted, attracting workers from all over the country.

“It’s key that they return to their previous strong states.”

No quick fixes

And as for the businesses suffering with a worker shortage, there are no quick-fix solutions, Mallett said.

“Can we get more people into better-skilled positions? That takes a long period of time, it’s not something you can quickly fix overnight.”

Adjustments will happen among businesses, as stronger, more efficient companies do more of the work and other firms find themselves unable to grow, Mallett predicted.

He added that, so long as the economy remains this strong, the labour shortage will continue.

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