An Examination of Alberta Labour Markets
Report examines Alberta labour market and impact of labour shortages
The scope of Alberta’s labour shortage and the need for recommendations on how to address those shortages were the catalyst for year-and-a-half-long study of one of the province’s most pressing policy challenges.
The University of Alberta’s Institute for Public Economics (IPE) commissioned the study to foster informed debate on the highly relevant policy issue. The research for the report was carried out by the Western Centre for Economic Research, Professor Joseph Marchand, Applications Management Consulting Ltd. and the Conference Board of Canada.
An Examination of Alberta Labour Markets explains that the opportunity cost of not filling jobs under an economic scenario similar to that outlined in Alberta’s 2013 budget is $33 billion in current dollars over four years. Lost personal tax revenue to the provincial and federal governments is estimated to be nearly $6.8 billion over four years.
The report emphasizes that several industries risk significant shortages—including retail, hotel and food services, and health care. Edmonton and the Banff–Jasper region are two areas at the greatest risk for labour shortages.
To counteract these trends, the report’s authors developed a number of recommendations to provide access to otherwise untapped labour groups including mature workers, disabled people and First Nations people.
“This comprehensive analysis leads to a number of concrete policy actions that can be taken by both the federal and Alberta governments,” said IPE Director, Dr. Robert Ascah. “The report’s recommendations are aimed at developing a highly skilled workforce which will benefit all Albertans. This means attracting the most skilled workers possible and ensuring we are doing everything we can to have apprentices complete their training.”
The research study was funded by the Government of Alberta and 12 associations and unions with an interest in addressing periodic labour shortages in Alberta. The study was carried out at arm’s length from the project’s financial sponsors, and they have not endorsed the analysis and recommendations in the report.
1. An Examination of Alberta Labour Markets: Labour Supply and Demand under Three Scenarios - offers more detail about labour market conditions under a high, low and base case scenarios.
2. An Examination of Alberta Labour Markets: Worker Shortages- Monte Carlo Simulation Analysis- examines Alberta job shortages using a Monte Carlo Simulation technique.
Following are the key observations and recommendations contained in “An Examination of Alberta Labour Markets”.
The province of Alberta leads all provinces in the scope of its labour market development activities and its occupational modeling products. However, consideration should be given to combining efforts into a single forecasting consortium and generating more frequent forecasts.
1. In the energy sector, many NOC titles and descriptions must be ‘mapped’ to the titles and descriptions used by oil and gas companies for the information to be understood. This has implications for modeling and for international recruitment efforts where workers who want to come to Canada must choose a NOC category that represents their skill set in order to be evaluated by Citizenship and Immigration Canada. Discussions with Statistics Canada should be undertaken to resolve these issues.
2. Labour market forecasting is an inexact science and should be used to determine whether actions to correct imbalances are necessary rather than to anticipate whether interventions will take place.
3. The different output formats used by the Alberta government, the Construction Sector Council, and the Petroleum Human Resources Council of Canada models make their results difficult to compare. Recognizing that the forecasts are produced for different target audiences, consideration could be given to standardizing the methodologies (see 1 above).
4. The Alberta long-term model shows the highest shortages in many lower-skilled occupations, and in some health care occupations. However, the model does not account for technological and productivity enhancements which are capable of mitigating shortages in lower-skilled occupations (such as sales clerks and cashiers).
1. Adopt a provincially-funded mentorship initiative, with particular emphasis on reducing the dropout rate of first-year apprentices. The preference is for this program to be implemented through industry associations.
2. Apply resources to establishing an advanced database for the apprenticeship programs to eliminate existing serious knowledge gaps. For example, there is a need to know the demographics of those who drop out of the program and their reasons for doing so, how many employers the apprentice works for and the duration of that employment, the spells of unemployment the apprentice experiences, and the apprentice completion rate when employed by smaller as opposed to larger businesses.
3. Alberta should make apprentices eligible for the student loan program. This would assist apprentices with overcoming financial impediments to tuition and tool acquisition.
These recommendations are designed to significantly reduce the obstacles for Aboriginal participation in the many transition and workforce opportunities that are available.
1. Early Learning Centres (ELCs) in neighbourhoods with large concentrations of Aboriginal families should receive compensatory funding to support additional educational activities and family outreach.
2. Because the educational attainment issue is multifaceted, where one policy is unlikely to fit all circumstances, supplementary funding should be available to school districts to allow them to pursue discretionary Aboriginal educational initiatives.
3. When student numbers warrant, Aboriginal organizations should be able to participate in school governance at the community level.
4. Data should be assembled on Aboriginal and non-Aboriginal performance on academic competency tests and that data should be made publicly available at the school level.
5. Aboriginals are under-represented in both teaching and educational leadership. This warrants aggressive action to encourage Aboriginal students to become teachers.
6. Abolish tuition fees for all those 19-25 years old, including Aboriginal people, attempting to achieve a high school diploma.
1. Alberta should remove all disincentives to continue workforce involvement beyond age 65 and, by doing so, recognize that retirement should be a matter of individual choice.
2. The Alberta government should actively engage with employers about the changing demographics that make the utilization of mature workers ever more compelling.
Workers with Disabilities
Enable additional capital expenditures for workers with disabilities to ensure they are able to more fully participate in workforce opportunities. Under current matching arrangement funding, the employer must bear at least 50 per cent of this added capital cost.
1. The government should assume 100 per cent of enabling capital expenditure cost, thereby eliminating a significant disincentive for employers to hiring disabled workers.
Fly in-Fly out
1. Systematic data on the fly-in/fly-out (FIFO) workforce is insufficient.. To correct this, government must assemble and publish data on a regular basis regarding construction workers versus operational and maintenance workers, as well as detail on the occupational mix of the Northern Alberta Temporary Workforce.
1. No business should be too busy to examine its productivity and how to improve it. We agree with Lori Schmidt, CEO of Productivity Alberta, ”that there is no better time than the present to start on your productivity journey—every day you are not looking at productivity is more money left on the table.” Government should give the highest possible profile to the mission of Productivity Alberta.
1. Immigration policy should be forward-looking by continuing to target for admission of the highly-skilled. This should be the priority of the Provincial Nominee Program.
2. Speed up processing times for the overseas study permit application, as well as for the permanent residency applications from all international students who graduated from known accredited institutions and are currently employed in Canada.
3. The provincial government should ensure and support the development of work environments and communities that are welcoming to newcomers.
4. The provincial government should phase out, over a reasonable three to five year period the eligibility in AINP of low skilled occupational categories and should support return of the TFWP to its original purpose of meeting temporary shortfalls for skilled workers.
Sponsors for the study were:
Alberta Enterprise and Advanced Education
Alberta Human Services
Alberta Construction Association
Canadian Association of Petroleum Producers
Canadian Home Builders' Association - Alberta
Construction Labour Relations - Alberta Association
Christian Labour Association of Canada
Construction Owners Association of Alberta
Electrical Contractors Association of Alberta
Human Resources Institute of Alberta
Institute of Chartered Accountants of Alberta
International Union of Operating Engineers, Local No. 955
Merit Contractors Association of Alberta
Petroleum Services Association of Canada
For more information, please contact:
Director, Institute for Public Economics