7. Match between supply and demand
Despite the slowdown in economic activity during 2008/09, the unemployment rate is expected to decrease gradually over the coming decade as labour force expansion slows and limits the number of new labour market participants. However, the gradual decline in the unemployment rate is not expected to lead to any generalized shortages in the labour market.
Given that the economy has been emerging from an economic slowdown over the past couple of years, the latest labour market conditions suggest few labour market pressures or shortages exist across the country. However, longer-term projections for the coming decades suggest some specific localized shortages may occur, but Canada will not experience sustained generalized shortages of workers. Overall, looking at broad skill levels, we expect that over the next ten years Canada will not face major imbalances of labour supply and demand in any one of the main five groupings. This is true despite the fact that there is expected to be significant differences in the annual demand for labour among some of these different skill levels. For example, the fastest growth in demand is expected for jobs which require university education (1.6% per year) while the lowest growth is expected for jobs which usually require a high school education or occupation-specific training (0.9% per year). Yet despite these differences, aggregate labour supply will roughly fill the expected aggregate demand.
However, looking at a finer level of occupational detail, there are areas where prospective labour supply will fall short of demand growth. In other instances, supply growth will exceed demand. These kinds of imbalances have traditionally been greater at the provincial/regional/local levels and this will most certainly happen in the future. This is a natural occurrence in a free-market economy, however better matching of occupational supply and demand and comprehensive labour market information can only improve the situation.
Potential labour market pressures over the decade are expected to be strongest in the health sector. This results from an above-average increase in new demand, an above-average number of people retiring, and an insufficient increase in new supply. As a result, future labour market conditions for this occupational grouping are expected to be “tight”. Pressures are expected to be particularly acute for such occupations as doctors, nurses, medical technologists and technicians and assisting occupations in support of health services. Growth in labour demand follows from an ageing population, increased government funding for health care and the high number of retirements. Supply growth is expected to be limited by a number of factors. New supply from immigration has been limited in the past due to foreign credential recognition issues and the strong global demand for health care workers. In addition, new supply from the education system will also be limited as a result of the long training time (up to seven years for doctors) and the institutional capacity to handle new enrolments.
Some improvements related to foreign credential issues have recently been made and will most likely help new foreign-trained entrants enter a number of sectors including health;Footnote 30 however, despite these improvements, it is expected that the demand for health-care workers will continue to exceed supply in the coming years.
Other occupational groupings expected to experience future shortages include:
- the management grouping of occupations for many industries/sectors largely the result of above average levels of retirements;
- human resources and business services professionals; and
- some occupations in the trades (especially contractors and supervisors of trades, electrical trades, heavy equipment operators) as a result of average growth in new demand but below average growth in new supply.
There are some interesting points to take away from the discussion above. There is not expected to be any sustained labour market imbalance by broad occupational level, but there is expected to be some imbalances for specific occupations. Furthermore, labour market pressures will not solely be confined to certain segments of the labour market – they will periodically appear across a wide range of jobs, ranging from health occupations to construction trades. In addition, while occupations that deal with advanced technologies or the “knowledge-based economy” are expected to be a growth leader, overall these occupations are not considered as key pressure areas as has been the case in some of the previous forecasts.
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