One Toronto. Two possible futures. Ten years to get it right. Toronto has never been bigger, bolder and more successful – or faced so many serious problems. To attract talent and grow sustainably, we need to address the city’s transportation, affordability and infrastructure needs. If we ignore these threats, the inner city buckles. It’s time to start thinking about solutions.
A forecast shortage of skilled labour is shaping up as a peril threatening future quality of life in the Greater Toronto Area.
A GTA already suffering an insufficient number of skilled workers would seem destined for debilitating shortages as it adds an estimated 1.2 million people in need of services to its population by 2030.
And yet, our resourceful city can master that challenge if it can shrug off its long-standing complacency, and embrace some common-sense solutions. Only three are presented here. None are new. They have simply never been taken up with conviction.
Training for 21st-century jobs
A twin-track reform in worker training is required to head off a severe GTA skills shortage by 2030.
Digitization, computer automation and artificial intelligence will demand that workers be “upskilled” to master rapid changes in their fields, or be retrained to succeed in New Economy vocations in which they have no background. In parallel with that challenge, the stigma around trades must be removed.
Existing skills shortages in the construction trades will become acute as Canada’s aging infrastructure is rebuilt.
And new trades will emerge for the likes of welders and electricians required to install residential solar panels, better protect communities from climate-crisis disasters, and build some 10,000 electric-vehicle recharging stations in the GTA, a 17-fold increase over the current number.
It is worrisome that in 2016-17, the latest period for which figures are available, Canadian employers spent an average of just $889 per worker on training per year, compared with a global average of $1,629.
A recent employer survey by PricewaterhouseCoopers found that only 56 per cent of Canadian CEOs regard digital fluency as an important skill, against a global average of 79 per cent.
There are some signs of enlightenment, of course. Bank of Nova Scotia has committed $250 million over 10 years to enable its workers to gain unsurpassed mastery of 21st-century technologies. And Royal Bank of Canada has invested $500 million in training programs to prepare Gen X workers for New Economy jobs.
“As digitization continues to shift the type of skills employers need, it will only become more urgent for Canadian companies to understand the impact of reskilling and upskilling programs,” says a Ryerson University report released last month on the employment-training challenge.
The needed sweeping workforce transformation is currently bogged down by arguments over who should spearhead it. A decisive Siemens AG, the German industrial powerhouse, has bypassed that debate by forging a partnership among itself, academia and government to become a global leader in workplace training.
If the Siemens model doesn’t catch on here, there is the option of a federal national training program that spurs tripartite training partnerships, the way Ottawa imposed the world’s first national carbon-pricing system in Canada.
The stakes are that high.
Immigrants and the credentialism curse
Immigrants will account for most of the job growth in the GTA over the next decade. Toronto is counting on newcomers to prevent a skills-shortage crisis.
But the labour market is rigged against immigrant skilled labour.
An alarming report last year from Statistics Canada shows that only 39 per cent of immigrants with a bachelor’s degree in a STEM field (science, technology, engineering and mathematics) actually work in a STEM field. That compares with 47 per cent for similarly educated Canadian-born workers.
Immigrants with bachelor’s degrees in STEM fields earn 28 per cent less per year than their Canadian-born counterparts, according to StatCan.
The chief cause of the problem is credentialism.
In computer science, where workers don’t need to pass muster with a credentialing body, Canadian and foreign-born workers enjoy roughly the same job opportunity and pay.
But it’s a different story for professionals, including engineers, doctors, accountants and pharmacists. They cannot practice without the imprimatur of a credentialing body, such as the College of Physicians and Surgeons of Ontario and the Law Society of Ontario.
For those practitioners, already in short supply in Canada, there is a wide disparity in job opportunity and pay between native- and foreign-born workers.
For instance, immigrants with an engineering degree are much less likely to be working in their field of expertise (only 48 per cent) than their Canadian counterparts (66 per cent).
Credentialing is a provincial and territorial function. Those jurisdictions have not forcefully pressured the unaccountable credentialing bodies to reform practices that are designed, at least in part, to restrict the number of practitioners and keep their compensation high.
That explains the stereotype of the foreign-born heart surgeon driving a cab in Toronto. It explains why, overall, immigrants earn about 10 per cent less than Canadian-born workers across all vocations.
That anomaly, according to a Royal Bank of Canada report, amounts to a $50-billion annual impairment to the Canadian economy.
Archaic practices in credentialism contribute to an existing GTA skills shortage that is certain to worsen in the absence of reform.
Women, the great untapped resource
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Canada could add a staggering 1.3 million people to the workforce if women’s participation in the labour market equalled that of men.
For the GTA, that works out to an additional 220,000 workers, a bulwark against skills shortages.
The rate of women participation in the workforce is about eight per cent lower than men.
That seems a modest number. Yet the McKinsey Global Institute has calculated that Canadian economic growth would soar by as much as $150 billion a year by 2026 with a truly female-friendly workplace.
That works out to a six per cent jump in GDP growth, at a time when Canadian GDP grows at about two per cent in a good year.
What’s required, according to McKinsey, is getting more women into the labour market in the first place; properly rewarding their contribution; supporting women entrepreneurship; and accelerating female managerial promotion.
As well, national daycare systems elsewhere have resulted in higher women participation rates in the workforce.
“The best path forward is for Canada to increase the labour force participation of women, Indigenous peoples and persons with disabilities,” says Pedro Antunes, chief economist at the Conference Board of Canada, “in combination with gradually increasing immigration levels.”
Yet, in the absence of reforms, the Canadian labour market continues to discourage and demoralize women.
Across the Canadian workforce, women earn just 87 cents on the dollar for work of comparable value to men.
When additional pay in the form of bonuses and profit sharing is included, the gap widens, to a 25 per cent discount on the value of women’s work.
Women are about 30 per cent less likely than men to be elevated from entry-level jobs, and about 60 per cent less likely to be promoted from middle management to executive posts, according to McKinsey.
The workforce punishes new mothers. Their pay continues to be reduced from pre-childbirth levels for five years after their return to the workplace, according to a recent Royal Bank of Canada report. (Men’s earnings actually increase after they become fathers.)
Together, child care and elder care demands drive about 15 per cent of women out of the Canadian workforce each year.
Employers have paid lip service to “flexible workplaces” for years. That has to change.
At this late hour, most employers still don’t set targets and measure success in meeting them — in closing the gender-pay gap; providing adequate training for male and female employees; providing flexible working conditions to accommodate parents; and ramping up the promotion of women.
Big employers are stuck in institutional paralysis in resisting change, while small business, which creates most new jobs in Canada, pleads poverty in choosing not to retrain its employees.
Confronting a potential GTA skills-shortage crisis will require considerable ingenuity across many fields.
By contrast, treating women workers with unfailing respect is a straightforward means of boosting GTA competitive advantage, and avoiding a skilled-worker brain drain.
Skills shortages are rampant worldwide, from Germany to China. The GTA is in a global race for the best and brightest talent. It’s a race we can win by getting an early start on adopting best practices.