Lack of skilled labour hitting B.C. economy hard

The lack of educated and skilled workers in B.C. nearly doubled in 2016 and is now costing the provincial economy $7.9 billion in forgone gross domestic product and $1.8 billion in lost tax revenues, according to the Conference Board of Canada.

The figures, released Tuesday, are dramatically worse than in 2015, when the board estimated the province was missing out on $4.7 billion in GDP and $616 million in tax revenue because of a shortfall of residents with necessary skills and education.

The new figures, contained in the report Post-Secondary Education Skills for a Prosperous British Columbia — 2016, are worrying B.C.’s university and college administrators, who say the shortage of skilled labour will handicap employers, leaving them without the human capital to innovate.

“B.C.’s future rests on its ability to develop well-educated, skilled and adaptable citizens,” University of Victoria president and chair of the Research Universities’ Council of British Columbia Jamie Cassels said in a statement.

“Our post-secondary system is among the best in the world, allowing students to choose their own pathways to personal and career success. And it is clear that in the coming years it must be even further positioned to provide the skilled workers who will fuel B.C.’s social and economic prosperity.”

The report noted there has been a rapid rise in the demand for employees with post-secondary credentials.

Those employees benefit, on average, with 30 per cent more pay than those without post-secondary education. It also notes that B.C. must increase access to postsecondary education if it is to meet provincial needs.

The rising demand for more skilled labour comes as the traditional marketplace for unskilled workers softens. Twenty-five years ago the workforce in B.C.’s largely forest, mining and tourism-based economy was split between unskilled and skilled workers. Today, 70 per cent of jobs are going to people with post-secondary education.

The analysis comes as another Conference Board report shows B.C.’s economy remains strong, with real GDP predicted to rise by 3.4 per cent, tying with Ontario for top spot in 2017.

However, it also says in its Provincial Outlook: Autumn 2016 that housing starts are expected to decline by 13.3 per cent next year and investment in residential construction will drop by 3.9 per cent, in large part because of the province’s new tax on foreign home buyers and persistent problems of affordability.

“The housing sector has been one of the main drivers of growth in British Columbia’s economy for the last couple of years. As a result of the implementation of a tax on foreign home buyers and affordability issues, housing starts will slow down in 2017 and the province’s economic growth will fall closer to the national average,” said Marie-Christine Bernard, associate director of provincial forecasts at the Conference Board of Canada.

B.C.’s future rests on its ability to develop welleducated, skilled and adaptable citizens.