Among the most-discussed measures in last week’s federal budget was the government’s plan to create a new “Canada Job Grant.” Finance Minister Jim Flaherty said Ottawa will contribute up to $5,000 per employee—if the employer and the province both provide matching funding—for short-term skills upgrading in places like community colleges and union training centres.
Flaherty said the plan will “transform” training and touted it as a key step toward improving the chances of workers filling in-demand occupations. But does his plan target the main problem? A report from CIBC World Markets, released late last year, found that most of the jobs facing serious skills shortages in Canada require post-secondary education—including doctors, nurses and dentists, optometrists, chiropractors, pharmacists, dietitians and nutritionists, along with mining, engineering and science occupations.
The report’s author, CIBC deputy chief economist Benjamin Tal, talked with Maclean’s about the real nature of Canada’s mismatch between skills and jobs.
Q. The recent federal budget emphasized short-term training upgrades. But the jobs you said are going unfilled tend to require serious post-secondary education. Is the government focus wrong?
A. Many of them, if not the majority, of the jobs with labour shortages do require post-secondary education. Many are in the health sector. We do also need plumbers, electricians. But the vast majority need post-secondary education.
Q. Where does the sort of short-term training Finance Minister Jim Flaherty drew our attention to fit in the mix of skills shortages and surpluses that your report described?
A. It is definitely part of the solution, but it’s not the whole solution. We do need to find a way to train people, for example, in manufacturing skills that are needed in Western Canada. Those jobs don’t need post-secondary degrees. But the problem has to do with education, with coordination between universities and colleges and governments, with the decisions being made by young people.
Q. Let’s talk about the decisions young people make. You point out big shortages in health, engineering and science. Is the root of the problem that we don’t encourage enough teenagers to seriously study math and science?
A. I think there is an element of truth to that. There’s a stigma. This is a difficult field, or a field just for the few. We see, quite frankly, in universities that students who excel in math and science are people that arrive from elsewhere. You can see a big difference between somebody who graduated from high school in places like China and people who graduated here.
Q. What should be done about it?
A. If we want to attract more people to those occupations we have to enhance accessibility to those fields. This means more help, more teachers, more focus. This is not happening.
Q. You’re talking about the culture of public education. That’s a long way from the budget’s focus on getting companies interested in upgrading the specific skills of their workers.
A. I would not criticize the budget on this. But thinking this is the ultimate solution is a mistake. The problem is much more complex, and the solution is multidimensional. I would say on-the-job training is only one dimension and not the most significant dimension.
Q. It sounds good to get companies more involved in skills. But why would a business trying to make money invest heavily in training, when they might be able to, say, recruit skilled workers abroad, or poach them from another firm?
A. That’s a big question. Time will tell. Will the new federal system help? Also, you need money from the provinces, which hasn’t been agreed on. It’s not a slam dunk.
Q. It’s been a few months since you released your report on the job market. What’s the reaction been?
A. The Prime Minister said this is one of the greatest problems facing the Canadian economy. The feedback we got was unbelievable—government, private sector, universities. This is not just about those people looking for jobs and companies looking for people. To the extent that companies can’t expand because it can’t find people, that means the economy can’t expand, and therefore wages aren’t rising, productivity is not rising, and the standard of living is not rising.
Q. What policy steps would you recommend first to begin solving the problem?
A. First, need to provide young people with information. Namely, a database so you can go and see the jobs of the future and what’s needed now. That’s the easy part and it’s not expensive. Second, we need better coordination between universities and government and corporate Canada. We need to make sure that what universities are producing is more relevant to tomorrow’s labour market. If it means more grants for fields of the future, so be it. If it means reduced subsidies for occupations that are not relevant, so be it.