Property Biz Canada

Canada’s labour problem: We need action, not excuses


Thanks to that bellicose fellow down south, we have ourselves a trade war.

Columnist John Clark.

Columnist John Clark is Vice President with The Regional Group of Companies Inc.

This is bound to have an impact on employment across various sectors of the Canadian economy. But policymakers shouldn’t let this furore mask the fact that we already had, and continue to have, a labour problem in this country. Nor should they attempt to avoid their share of responsibility for fixing the problem by blaming it on a trade war.

That problem is a shortage of skilled labour, and of labour in general, depending on which industry vertical and salary bracket you look at.

Last week, The Toronto Star ran an article about how Ontario Premier Doug Ford might have to raise public sector wages to woo the talent needed to fill vacancies, particularly in health care. That puts the new premier in a tight spot, considering he has vowed to reduce government spending by some $6 billion a year without cutting a single public service job.

But the challenges of finding the right person for the job extend far beyond the public sector.

The labour problem is everywhere

In the past few weeks, we have seen stories such as:

The Globe and Mail looking at how restaurants are turning to temporary staffing apps which connect workers to short-term jobs, to address chronic issues with filling drudge jobs like dishwashing.

CBC reporting on the driver shortage faced by the trucking industry. Freight and logistics companies struggle to fill positions as fast as baby boomers are leaving them.

The Ottawa Citizen, exploring the “crisis” gripping home care agencies across Ontario. With an aging population and a push to put fewer people into institutional care, there is an acute shortage of personal support workers because few are eager to work irregular hours and always be rushing between appointments for only a dollar more per hour than minimum wage.

Ontario’s horticultural industry fighting to retain a long-running program that allows growers affected by a chronic labour shortage to hire workers from Mexico and the Caribbean on a seasonal basis.

This doesn’t even touch the challenges facing our knowledge-based economy. Careers in STEM (science, technology, engineering and mathematics) are growing by 4.6 per cent each year, versus 1.8 per cent in the job market as a whole, according to a Globe and Mail story from May. The sector is expecting a skills shortage of approximately 220,000 positions by 2020.

All of which raises a number of questions

– What kind of jobs are vacant, and what are the salary levels?
– Are people trained for today’s job vacancies or do we need people with new skills?
– Are we simply short of people and we need more immigration?

Then there is the real estate impact

We must also ask to what degree is this situation aggravated by the cost of living in certain cities, like the GTA? If the cost of living is too high, it’s quite difficult to attract people to jobs below a certain salary level.

There is a circular relationship between the cost of real estate and employment. Higher levels of employment and higher-income jobs create higher demand for real estate, which in turn, drives up prices. Conversely, this makes it difficult for people who would otherwise qualify for lower income jobs to make a go of it in high-priced communities.

I first saw an example a few years ago while staying at a hotel in Toronto. The hotel highlighted a green initiative – in return for a small discount on my room rate, I could elect to forego daily housekeeping service.

The environmental benefits of less laundry washing aside, my first reaction was that the hotel can’t get staff at the price it’s prepared to pay. I still hold this opinion. More recently, I read about restaurants in Vancouver going to counter service rather than table service because they can’t find anyone to wait tables at a price the restaurant can afford to pay.

Even if you look beyond these less lucrative service jobs, the problem still persists. When you look at the rampant price appreciation in urban markets like Toronto and Vancouver, even well-educated knowledge workers and other skilled professionals low on the totem pole can find the cost of living untenable.

. . . And a skills mismatch

Then there is the added issue of skills match. The Canadian Federation of Independent Business’s quarterly help wanted survey continues to report that around 400,000 private sector jobs across the country remain unfilled in any given quarter while some 1.1 million people remain on the dole, as Canada continues to experience unemployment rates at 40-year lows.

According to CFIB’s Ted Mallett, this has forced many businesses to boost wages, cut capital spending and even reduce production. He told the CBC in June that, on one hand, this is good news – it indicates the economy is firing on all cylinders (we’ll see how a trade war pinches that in the months to come). But on the other hand, it indicates a skills mismatch – two out of every three of those unfilled positions require some sort of skilled labour.

“Most of these employers will not really find what they are looking for,” he said. “They will have to make adjustments of some sort, maybe mechanize part of the process, or perhaps change the nature of the job, start to upskill people who already work for their business, or even decide to stay small.”

Back to Industry 4.0

It all comes back to what I talked about in my previous column (There is no fear in Ford Nation) – the world is changing, the nature of work is changing. It’s that Industry 4.0 Effect.

While our political leaders are trading barbs over international trade, and what really is a distraction over refugees, they need to keep their attention on the true challenges facing our labour market. The evidence points to lots of new jobs and more on the horizon.

But at the same time, there are lots of old jobs that will disappear – nothing new there. What government now must do is formulate and implement – PDQ – measures that ensure people who work in jobs that are disappearing get the opportunity to retrain and we have the skilled labour force we need for the 21st century.

 

To discuss this or any valuation topic in the context of your property, please contact me at jclark@regionalgroup.com. I am also interested in your feedback and suggestions for future articles.

 

 

 

 

 

 

 

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John Clark

About the Author ()

John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited member of the Appraisal Institute of Canada and has been with Regional since March 1988. His experience includes the appraisal of commercial and investment real estate, including limited use and non-market properties located in most Canadian jurisdictions. John has been an active member of the Appraisal Institute of Canada, and served as its National President for 2001-2002. He also has appeared as an expert witness in court and assessment tribunal hearings, including the Assessment Review Board – Ontario, the Property Assessment Review Board – British Columbia, and the Dispute Advisory Panel (PILT) – Canada. Clients include national institutions (including crown corporations, transportation companies, municipalities, Public Works and Government Services Canada), private companies and individuals.

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