Labour shortage ‘new reality,’ think tank says

HALIFAX — A worsening labour crunch is sweeping across Atlantic Canada, with a new report finding half the region’s businesses are struggling with recruiting and retaining workers.

The Atlantic Provinces Economic Council says the tight labour market is impacting firms large and small across all industries.

And it’s not expected to improve any time soon.

The economic think tank says the labour shortage is expected to become the new normal.

“This is the region’s new reality,” APEC said in its January 2020 Report Card released Tuesday.

Indeed, demographic projections suggest the situation is not likely to materially change during the next two decades, the report said.

At issue is a historic demographic shift. The region now has more deaths than births, and without newcomers Atlantic Canada’s population would be shrinking.

“Low fertility rates and outmigration of young people have led to a decline in the number of births,” APEC said in its quarterly report. “The aging population, accentuated by the aging cohort of baby boomers, is reflected in a steady rise in the number of people dying.”

The situation is having a dramatic impact on the labour force.

Three decades ago, there were 20 workers entering the region’s labour market for every 10 retiring. Now there are only seven.

The acute worker shortage has led to a drop in the unemployment rate and rising job vacancies in all four provinces, APEC said. For example, the number of unfilled jobs rose to 20,000 last June, up from 12,000 three years before.

It may be good news for workers, who could benefit through better wages, benefits, training and flexible workplaces.

But APEC warned that the labour and skills shortage could lead to higher operating costs for businesses, lower productivity and stifled innovation, dampening output and slowing economic growth.

The think tank said there is no single solution to the region’s labour market woes, but rather a number of measures that will help.

APEC said immigration and reaching out to underrepresented groups — including females, people with disabilities and Indigenous workers — will be critical to the economy.

So will investments in technology and automation, which would help reduce labour needs by eliminating repetitive tasks and jobs that are hard to fill, the report said.

Workers may also be encouraged to delay retirement, the report noted, adding that education and training that addresses labour market needs is also important.