Four Priorities to Spur Growth in Canada's Struggling Labour Markets - C.D. Howe Institute

TORONTO, Feb. 2, 2016 /CNW/ - Canada's policy makers should focus on four priorities to spur growth in Canada's economy, according to a new report from the C.D. Howe Institute. In "Job One is Jobs: Workers Need Better Policy Support and Stronger Skills," author Craig Alexander outlines the key policy priorities that will reduce Canada's labour market vulnerabilities.

The report notes that  the nation's labour markets are being transformed by structural forces of globalization, technical change and aging demographics, while being buffeted by cyclical factors like the recurring boom-bust in commodity prices. "These forces have displaced many workers and have led to persistent and – amid the current commodity price shock – growing slack in the labour market," states Alexander. "Moreover, the structural trends are raising demand for high-skilled positions relative to middle- and low-skill jobs." Therefore questions arise about whether the composition of Canada's labour supply is keeping pace with the changing times.

Drawing on C.D. Howe Institute research, the report recommends four key policy priorities that will prepare Canada's labour market for tomorrow. They are:

1. Support for Displaced Workers: EI reform is badly needed. Regionally based eligibility criteria should be replaced by uniform, countrywide, employment insurance entrance requirements and benefit durations. If regional differences are desired, the federal government should hive off this responsibility to the provinces to create a regional benefit top up or entrance requirements.
2. More Detailed and Accessible Labour Data: Canada needs more timely, accessible and relevant labour market data to diagnose vulnerabilities in labour markets and provide evidence based solution.  More publicly available data at an appropriately detailed level could help with the matching of domestic employers with domestic workers, thereby reducing the need for temporary foreign workers.
3. Upskilling: Canada needs more and better skills development to boost productivity, raise employment and fuel stronger income growth for workers. Virtually all net job creation from 1999-2012 was in high-skill jobs. Globalization and technical change is depressed demand for middle-skill jobs, which are likely to come under further pressure in the years ahead due to weaker prospects in the resource sector and cooling in real estate related construction activity.
4. Barriers to Success: Beyond the general call for more and better skills development, it is evident that there are underutilized pools of labour. Tapping these pools – including youths, immigrants, and aboriginals – more effectively requires removing barriers to success.

"It is a very Canadian challenge in that no single level of government is responsible for labour market policy, and this can lead to an absence of leadership," notes Alexander. However, a case can be made for strong federal leadership, in cooperation with coordinated and committed actions by the provinces.

"In the final analysis, addressing the many opportunities for improvement in labour markets is a key ingredient in delivering more prosperity to Canadians," concludes Alexander.

For the report go to: https://www.cdhowe.org/public-policy-research/job-one-jobs-workers-need-better-policy-support-and-stronger-skills

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

SOURCE C.D. Howe Institute

Craig Alexander, Vice President, Economic Analysis; Daniel Schwanen, Vice President, Research, C.D. Howe Institute: 416-865-1904 or email: [email protected]