Hot! Canada flying blind on labour shortages: Drummond

TheGlobeandMail.com – ROB/Commentary/ROB Insight
Jun. 11 2014.   David Parkinson

Five years ago, a government-struck advisory panel identified a “desperate need” for Canada to improve and co-ordinate its data measuring the labour market to address growing concerns about labour shortages and skills mismatches that threaten to hamstring Canada’s economic potential. Today, that committee’s chairman, respected economist Don Drummond, says the improvements have been inadequate – largely because the co-ordination has been all but non-existent. Chiefly, he says, we need some leadership that has been sorely lacking.

In a report written for the Institute for Research on Public Policy, Mr. Drummond – the former chief economist at Toronto-Dominion Bank and a prominent voice in many of Canada’s key public-policy debates – said that many of the most important recommendations of his 2009 Advisory Panel on Labour Market Information have either not been implemented, or have been so in only part-measures. And the biggest among them is that there is still no single body that has taken responsibility for making the decisions on how best to address the gaps in Canada’s labour market.

“The principal obstacle to greater progress is that no entity has stepped forward to take charge,” Mr. Drummond wrote.

He called on Ottawa to take the lead by giving Statistics Canada the responsibility – and the necessary resources – to be the central gathering system for the country’s needed labour-market information. At present, too much of the data are fragmented, not just among federal government departments but also within provincial governments and even down at the local level, leaving gaps and inconsistencies across the country. He suggested, as his panel did five years ago, that Statscan could act under the oversight of a better-resourced Forum of Labour Market Ministers, a joint body of federal and provincial ministers that was formed in 2008 to address key labour issues (and was responsible for forming Mr. Drummond’s committee), but has met only sporadically since.

All of this comes amid an increasingly intense debate about the state of Canada’s labour needs. Policy makers and economists can’t agree on how big the skills-shortage problem is, where it is, and what skills are most needed. The Foreign Temporary Worker Program has become a massively controversial attempt to address labour shortages. Attempts to measure job vacancy levels have been hotly debated. Ottawa’s proposals to step up job-training programs have run into opposition.

These, Mr. Drummond said, all touch on the key inadequacies of Canada’s attempts to measure its labour market needs. We have no clear measures or future forecasts for labour shortages. Job vacancy statistics lack granular detail on specific regions and skills where shortages exist. Information on the employment outcomes for graduates of college and university programs is wildly outdated (the most recent statistics are for 2007); we have little information at all about the training provided by employers.

“Good [labour market information] is not a sufficient condition for effective matching of skills and labour market needs. But it is clearly a necessary condition,” Mr. Drummond wrote. “Good matching cannot occur if the agents – individuals, businesses, educational institutions and governments – do not have a clear idea of what skills are required.”

In 2009, Mr. Drummond’s panel argued that for an additional cost of about $49-million, Canada’s labour market information could be brought up to the necessary speed. The economic payoff, through reduced unemployment and improved labour productivity, would outweigh that by many times: He estimated that a reduction in the jobless rate by just one-tenth of a percentage point would add $800-million to Canada’s annual gross domestic product.

Instead, Ottawa has slashed the budget to Statistics Canada in the ensuing years. And while some improvements to labour market data have been implemented, the gathering and availability of the data have become more fragmented, not less.

Mr. Drummond’s new report is a long-overdue call to arms for Ottawa, in co-ordination with its statistical agency and the provinces, to take action. If we care about labour shortages and their impediment to economic potential – and we do – we need to focus some attention, and funding, on getting this right. Before another five years are wasted.

< http://www.theglobeandmail.com/report-on-business/rob-commentary/rob-insight/canada-flying-blind-on-labour-shortages-drummond/article19115455/#dashboard/follows/ >

Leave a Reply

Your email address will not be published. Required fields are marked *