3. How many job openings in the future?Footnote 4

Historically, economic growth has been the key driver behind labour requirements in Canada. However, this is not expected to be the case in the coming years. Instead, job openings due to retirements will be the major driver behind labour demand in the future, far outpacing the number of new jobs created by economic expansion.

Projections from Human Resources and Skills Development Canada (HRSDC) indicate that roughly 6.4 million jobs will open up in the coming decade. Roughly 70% of these jobs will be due to replacement demand (mainly the result of retirements,Footnote 5 deaths and emigration), with the other 30% coming from expansion demand (new labour requirements as a result of increased economic activity). The main factor leading to this trend is related to demographic change. Slowing growth in overall population expansion and the ageing of the population are beginning to, and will continue to, have a dampening effect on labour force growth which will also affect employment requirements.

To satisfy replacement demand, there will be a need for approximately 4.4 million jobs in the coming decade. The numbers retiring from the labour market are expected to ramp-up steadily from roughly 300,000 in 2010 to 415,000 by 2020 – resulting in 3.7 million positions vacated as a result of retirements. An additional 700,000 positions will need to be filled due to deaths prior to retirement and emigration.

Looking at expansion demand, 2.0 million new positions are expected to be created in the Canadian labour market as a result of new economic activity over the next ten years, even with average annual growth of employment in the 1% range. The strongest growth will come from jobs classified in Skill Level A (1.6%), followed by positions classified as Skill Level B (1.2%) and management positions (1.1%).Footnote 6 The growth pattern expected to evolve by skill level exhibits the characteristics of a knowledge-based economy with the strongest growth coming from positions which typically require higher levels of education (Skill Level A, B and Management) as opposed to jobs classified in the lower skill levels (Skill Level C, D). Two-thirds of all job openings will require postsecondary education – including university, college or apprenticeship training.

In terms of industry employment growth, there is expected to be a relative balance between goods and service-producing industries. However there is substantial variance within these two broad groupings. Industries with the strongest growth include mining and fuels, professional, scientific and technical services, transportation equipment and health care services. In contrast, employment growth is expected to be well below average for public administration, educational services and most manufacturing industries. It is important to note that job opportunities will exist in every part of Canada. However, labour requirements vary considerably by region and this is expected to continue in the future. Differences in demographic profiles, population growth and industrial composition weigh heavily on the number and types of jobs which will be required regionally.

As noted above, the impact of demographic change (slowing population growth and population ageing) in the coming years has a significant impact on the employment outlook. While the labour market will be impacted by weaker demand from slowing population growth, an increase in the number of retirements will drive the need for replacement workers, which becomes the main driver of employment demand in the future. In addition, assumptions regarding labour productivity also play an important role for labour-market requirements in the forecast. In this forecast, labour productivityFootnote 7 is expected to increase from the rate recorded in the first decade of the 2000s – this is consistent with various productivity enhancing strategies incorporated by a number of industries in the face of increased global competition and weaker domestic labour force expansion.

The outlook outlined above provides a baseline view of how many jobs will need to be filled in Canada during the coming decade. Given the current economic situation in Canada (strength and stability of the recovery, a strong employment rebound and a gradual decline in the unemployment rate) and the need for a more highly educated and skilled workforce in the future suggests a relatively positive picture for new highly educated labour-market entrants – including immigrants.

However, as is the case with all outlooks, there are risks that may significantly alter the outlook. Business cycles have a significant impact on the overall level of growth in the economy and certainly have an impact on future labour supply and demand. Research has shown that the economic outcomes of immigrants are especially hard hit during recessions, as is the case for new labour-market participants who are Canadian-born.Footnote 8 However, recent immigrants seem to have the weakest economic outcomes despite having very high levels of educational attainment and, consequently, future fluctuations in the business cycle may be particularly detrimental to this group.

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