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Is there a labour shortage in Canada? Evidence is skimpy and selective

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OTTAWA - Is there a skilled labour shortage in Canada? Many employers say there is, but even some business surveys and the government's own research suggests the evidence is at best slim and sporadic.

Amid the brouhaha triggered by a contractor of the Royal Bank to bring in temporary foreign workers to replace the bank's Canadian ones, opposition parties are itching for Parliament's return Monday to hammer the Harper government over the decision last spring to relax rules making it easier to import workers.

The government is getting some backing from the Canadian Manufacturers and Exporters association. The lobby group released an internal survey of members showing half reporting difficulty finding qualified workers, and expecting the problem to worsen in the next five years.

The organization's vice-president of national policy, Mathew Wilson, says shortages are widespread but particularly acute in certain industries and regions, particularly Saskatchewan, Manitoba and Newfoundland.

"The companies we talked to in Saskatchewan will literally hire anyone who shows up to work every day," he said. "They are that desperate."

Wilson says there has been plenty of jobs lost in the manufacturing sector — including 71,000 in the last year alone — but adds that there's a skills disconnect with those that have been laid off in Ontario and the needs of the expanding resource sector in the West. As well, getting workers to move is difficult, he says.

"A lot of the manufacturing jobs are not in the biggest centres of Canada," said Wilson. "It's hard for a company in a town of Saskatchewan, population 300 people, to be able to draw in workers from Toronto. It's hard for someone in Windsor to go to the peninsula in Newfoundland to work in the mines."

The survey results are at times, in line with alarmist declarations by government ministers — including Finance's Jim Flaherty and Human Resource Minister Diane Finley — that Canada faces a critical skills mismatch that is impeding economic growth.

But they are at odds with other studies and surveys, including one from Finley's own department, that suggests the problem may be confined to a minority of industries.

In a report titled "Imbalances Between Labour Demand and Supply, 2011-2020" prepared by researchers at Human Resources and Skills Development Canada, the conclusion drawn is that there is no general labour shortage today, nor will there be in the next decade despite the aging workforce.

The report found no general disconnect when it compared the 6.5 million job openings expected over the next 10 years to anticipated skill levels likely to come out of Canada's high schools, colleges and universities, as well as from immigrants.

"With limited incidence of imbalances between labour demand and supply in recent years, and with the projections showing similar levels of job openings and job seekers for each broad skill level, no major imbalances by skill level are projected over the next decade," the authors concluded.

The researchers concede that the finding does not preclude imbalances existing in specific occupations — or regions — and in fact say they expect shortages in high-skilled industries such as health, management, trades, transport and equipment and especially in the resource sector.

This week's business survey by the Bank of Canada also undercut the job shortage story. It found the percentage of employers reporting labour shortages restricting their ability to meet demand fell for the second consecutive quarter and "is below the survey average."

The main data on employment — Statistics Canada's labour market survey — places the unemployment rate at 7.2 per cent — more than one percentage point higher than in 2008 — and the number of jobless at almost 1.4 million, also higher than before the recession.

Andrew Sharpe of the Centre for the Study of Living Standards says a key indicator of whether any profession or industry has a shortage of available bodies is salaries.

If salaries go up, shortage of supply is a likely cause. But there is no indication of a wage explosion in Canada in any industry, he said. On average, weekly wages rose 2.1 per cent in the past year, about the trend rate of inflation.

"If you have a real shortage and you need someone badly, you will be willing to pay them more money," Sharpe explained.

But that is rare, he said, and one solution would be for employers to train someone from within rather than import workers at a lower wage.

In fact, the government made it possible to do just that last spring, allowing firms to pay temporary foreign workers, which can stay in the country for four years, up to 15 per cent less than the going rate.

NDP Leader Thomas Mulcair accused the government of putting in place policies that undermine the working conditions of Canadian workers.

The federal government pledged in the budget to review the program, but made no specific mention of the 15 per cent rule.

The issue will get plenty of airing once Parliament resumes on Monday, however. Liberal critic Rodger Cuzner plans to introduce a motion calling for the establishment of a special committee to hear from Canadians impacted from the foreign workers program, and to propose solutions.

Cuzner said that "some employers are acting responsibly" but that others have used the opportunity "as a vehicle to replace Canadian workers with foreign workers."

He points that under the Conservative government, the number of temporary foreign workers in Canada has expanded from about 140,000 to 338,000.

"What they've done is created a pool of cheap and more or less submissive labour," said Cuzner.

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