Don Drummond | June 13, 2014
Canada has poor labour market information and as a result we do not have answers to simple questions that affect Canadians’ livelihoods. Employers complain they cannot find enough skilled workers, yet the Canadian unemployment rate is far from its lowest level. Does Canada not have enough workers or are they in the wrong places with the wrong skills? Why are wages not rising more sharply in occupations in demand? In the past, graduates of general college and university programs have done well economically and socially. Should young people disregard the record and heed suggestions there won’t be good jobs for them? The Canada Job Grant is being introduced to encourage employers to provide more training to their workers; but how much training and what kind of training do employers now provide?
The federal, provincial and territorial governments were concerned about not having answers to similar questions in 2008, and through the Forum of Labour Market Ministers (FLMM) struck an Advisory Panel on Labour Market Information, of which I was the chair. The Panel made 69 recommendations that, at an annual cost of less than $49-million and spread across 14 governments, would have provided answers to the questions above and a great number of others. Jason Kenney, federal Minister of Employment and Social Development, recently claimed two-thirds of the recommendations have been or are in the process of being implemented. Unfortunately, many more are in process than accomplished. And most of those in process are in early stages of preparation. Meanwhile, even some of the information available in 2008 has been jeopardized by successive budget cuts, particularly to Statistics Canada, the main provider of labour market information.
As I argue in a paper for the Institute for Research on Public Policy, the main reason so little progress has been made is that no entity has stepped forward to drive a national program to collect, disseminate and explain better information. The Advisory Panel naturally recommended the FLMM play this co-ordinating role. But they have not taken up the mantle of leadership.
The need for better information has never been greater. Not only would it benefit Canadian employers and workers, but recent difficulties with policies such as the Canada Job Grant and the Temporary Foreign Worker Program highlight that policy action must be shaped by good information.
While the goals of the Advisory Panel are still valid, a different path is needed. Federal, provincial and territorial divisions seem too much for any single entity to do it themselves. So the task should be broken into more discrete pieces that can be pursued by various players. The provinces should continue to improve information within their borders. The federal government should take the lead on providing national information. With strengthened components, the FLMM should then be able to effectively co-ordinate efforts to ensure a comprehensive pan-Canadian LMI system.
Statistics Canada should be given the mandate and necessary resources to improve its coverage of labour market information. In particular, it should implement a better job vacancy survey, figure out how to provide more granular local and occupation data, and more closely monitor the economic and social outcomes of college and university graduates.
One of the few Panel recommendations to be implemented was the creation of the job vacancy survey. But with the results aggregated into a small number of industries and available only at the provincial level, the survey is of little help to job seekers or policy analysts. In the last two federal budgets, the federal government further clouded the view of job vacancies by publishing their own estimates, which were well above the official Statistics Canada figures. It has recently been acknowledged that some double counting went into the budget numbers but a full reconciliation to the Statistics Canada figures has never been provided.
In most cases genuine labour shortages are restricted to particular occupations and geographical regions. For the most part data is not available at this level of granularity. On Wednesday, Minister Kenney announced that the government intends to expand the collection of data on vacancies and wages at the regional level. When implemented by Statistics Canada, this will be a good step forward.
Well before young people graduate from high school they should have a good sense of the likely employment and income prospects of various fields of post-secondary study. More timely surveys with appropriate dissemination of the information could fill part of this gap. Better still would be a comprehensive program across Canada to anonymously link student identification numbers with income data from tax returns.
Better labour market information will naturally improve the decisions of employers, workers and education institutions. There will of course still be obstacles to a well- functioning labour market. But with the information, policies of the federal, provincial and territorial governments can strategically target the issues identified.
Don Drummond is the Matthews Fellow in Global Public Policy, Queen’s University, and was Chair of the Advisory Panel on Labour Market Information in 2008-09.