June 22, 2006

Alberta labour shortage is just ‘tip of the iceberg’: report

OTTAWA

Alberta’s labour crunch is likely to get worse, as the province’s annual shortfall of workers would reach 332,000 by 2025 if current trends were to continue, the Conference Board estimates.

“The well-publicized current labour shortage in Alberta is just the tip of the iceberg,” said Glen Hodgson, Vice-President and Chief Economist. “Something will have to give, as no economy can sustain such a huge and growing gap between labour demand and supply. If faster growth in labour productivity does not make up for the shortage in workers, the province will be unable to achieve its economic growth potential.”

Markets will adjust to compensate for the labour crunch. A rapid increase in wages is a likely outcome, driving companies to substitute capital for labour and to increase labour productivity. Higher wages could also make some projects so expensive that they would not take place, thereby delaying capital investment, and reducing potential economic growth.

While no one solution exists, the Conference Board’s briefing, Alberta’s Labour Shortage: Just the Tip of the Iceberg, suggests several actions that would ease the shortage. These include attracting more immigrants to Alberta, doing a better job of recognizing foreign credentials, improving training and apprenticeship programs, implementing labour mobility agreements with other provinces beyond its recent pact with British Columbia, and encouraging Aboriginal Canadians and older workers to enter or remain in the workforce.

Even more innovative approaches may need to be considered to attract workers from within Canada and abroad.

DCN NEWS SERVICES

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