Atlantic Canada Must Overcome Low Wages, High Taxes To Address Skills Shortage: APEC
HALIFAX–Labour shortages continue to hamper businesses of all sizes across Atlantic Canada and there’s no one way to solve employment woes. That’s according to the latest report from the Atlantic Provinces Economic Council (APEC) that looks at the region’s skills shortage.
“People struggled to find jobs and now people are struggling to find workers, so it’s just a complete shift from what we saw 20-25 years ago,” says Patrick Brannon, a senior researcher with APEC.
Brannon, who wrote the report, says there are now only seven new entrants into the labour force for every 10 retirees. In 1990, there were 20 new entrants for every 10 retirees.
With more businesses seeing only a few, or sometimes no, applicants for each job they post, Brannon says finding talent has become an even greater issue for the Atlantic Canadian economy.
While overall employment numbers have largely recovered since the beginning of the Covid-19 pandemic, some sectors, particularly tourism and other travel-related industries, are lagging. Many are now dealing with the growing labour shortage on top of existing public health restrictions.
Education and training updates needed
Brannon says job creation and skills training policies offered by provincial and federal governments need to be updated. He says equally outdated strategies that many industries have employed to attract staff also need to change.
In some cases, those strategies were drawn up nearly 20 years ago and have done little to address the demographic problems feeding the current labour and skills gap.
“I think some companies are certainly embracing that change,” says Brannon. “If you want to invest in technology, you can invest in automation and things like that to reduce your labour demands.”
While Brannon agrees it’s likely something larger firms are more equipped to implement than smaller ones, he says even the smallest businesses looking for talent can develop a strategy and value proposition to help secure and retain the right candidates.
Brannon says that could mean ensuring incentives like wages, financial and non-financial benefits, working environment, and future opportunities are competitive and attuned to what employees actually need.
According to Brannon, that type of flexibility is essential in treating employees as individuals. He adds that existing employees need to be treated “as an asset for recruitment and retention,” and stresses how much workplace culture is becoming a deciding factor for today’s applicants.
Programs and policy to address barriers
Brannon says governments need to be more aware that with fewer people entering the labour market it is essential for high school graduates to get the foundational skills and literacy they need to meet the needs of employers. He hopes governments can review existing programs to ensure they meet what employers are also looking for.
He says as new industries emerge to meet a lot of digitalization and green-related changes happening in the economy, industries are shifting to meet those demands. He uses bioscience and aerospace careers in PEI as an example of carrying vastly different skill sets than that of traditional provincial industries like seafood and agriculture.
While immigration has often been looked to as a quality source of labour for industries looking for the right skill set, Brannon contends international immigrants are more likely to move to larger urban centres or regions with established immigrant communities and settlement support services.
While retention of new arrivals is improving, it remains a concern in many Atlantic communities.
Wages remain a massive hurdle
Brannon says the non-competitive wages still offered in many sectors remain one of the region’s long-standing macro-economic challenges.
The report underscores how historically lower wages in Atlantic Canada remain a barrier to recruitment and retention of workers, while high personal income and sales taxes are another deterrence for attracting labour from outside the region.
He says lower housing costs and other quality of life factors marketed as attractive reasons to relocate might not be enough on their own to compensate for the lower wages and salaries.
Reduced opportunities for advancement due to smaller market size and a lack of broadband internet service also continue to hinder remote work options for many rural communities, according to APEC’s report.
He urges governments to reassess the changing occupational preferences of young people, something he says “is making it harder to attract a traditional workforce.”
Brannon describes a lack of graduates from specific trades or postsecondary programs (like those based around computer sciences) making it difficult for some companies to fill even entry-level positions that require those skills.
If labour shortages aren’t dealt with more comprehensively by governments, Brannon says it will continue to result in serious negative impacts on firms and the economy as a whole. Some of those could be reduced production and continued service and supply chain disruptions.
Beyond expected raises to the minimum wage for all Atlantic provinces in 2022, Brannon says there have been some positive developments announced over the previous months.
“The new childcare agreements with the provinces is really important to get more women back in the labor force quicker. So that’s one thing the federal government’s done in partnership with the provinces.,” says Brannon. He adds that such programs are critical in helping ease the movements of people between jobs.
He says remote work is here to stay and expects the ability to do so to becomea more important factor for recruitment in the region.
“Some people were making that transition, others were avoiding it because they weren’t sure how it worked,” Brannon said. “But now that we’ve been forced to do it I think workers have certainly enjoyed the ability to work from home and that’s something that we’ll continue to see. Especially in job demands, they’re going to want to have that ability. You’re very likely going to choose that job even if it offers maybe a slightly lower salary.”
Tyler Mclean is a Huddle reporter based in Fredericton. Send him your feedback and story ideas: [email protected].