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Canada’s Economic Action Plan: Problems with ‘Canada Job Grant’ ad go beyond fact program doesn’t exist (updated May 22, 2013)

A big deal was made over the long weekend of the current federal government’ advertising a ‘Canada Job Grant’ program that not only doesn’t exist, but hasn’t even been developed.

Apparently the government has spent in excess of $100M to date on such ‘Economic Action Plan’ ads. Imagine how many jobs that could have created. This is the latest manifestation of its view of Canadian workers as lazy, dim-wits who just aren’t looking hard enough for all the jobs available. Cue up the cartoon unemployed Canadians looking despondent with question marks in their thought bubbles. So many things wrong on so many levels with the ad. Let’s just move on to what little content it presented.

1. Canada is facing a SKILLS SHORTAGE (that needed to be put in CAPS for you)

The funny thing is the caption is surrounded by ‘APPLY HERE’, ‘WANTED’, ‘NOW HIRING’ signs, to imply that the reason so many Canadians, especially young Canadians, remain unemployed 5 years after the recession began, is because they lack skills to fill all those jobs sitting there for the taking. Which is interesting, because by the government’s own questionable stats, it would appear the problem is a lack of jobs, not skills to fill them. Today’s (May 22, 2013) job vacancy report notes There were 6.4 unemployed people for every job vacancy, up from 5.9 one year earlier.

The same report indicates the top industries by job vacancy rate were ‘Administrative and support’ and ‘Arts, entertainment and recreation’ (both at 2.1%). ‘Health care and social assistance’, ‘Retail trade’ and ‘Accommodation and food services’ were reported as having the highest total number of job vacancies (34, 24 and 22 thousand, respectively). The nature of the jobs available is unspecified (the survey is by industry, not occupation), although retail and food services can safely be taken to refer to Walmart and McDonalds type jobs. Canada’s ageing population and increased demand for health and social services following the Great Recession explain the demand in ‘Health care and social assistance’.

2. With baby-boomers retiring, there is a looming LABOUR SHORTAGE (in CAPS again)

As we and others have touched on already, the baby-boomers aren’t retiring en masse any time soon. Some have lost a significant portion of their nest egg in the market meltdown during the recession; many had never saved up enough to retire in the first place. The CPP (and QPP) funds suffered substantial losses during the recession, and the federal government increased the age for seniors to qualify for OAS/GIS. The federal government repealed the mandatory retirement exemption in the Canadian Human Rights Act, effective December 15, 2012. Boomers’ disincentive/inability/unwillingness to retire has been and will remain a major issue for Gen-X/Y, whose continued struggles in the labour market are beginning to manifest in other areas of the economy (housing, personal debt, consumer spending). The ‘looming’ labour shortage is at best hypothetical at this point, as the data simply doesn’t support it.

3. Workers and students DON’T KNOW about opportunities in high-demand fields (ditto CAPS)

You’ll notice the first job in that list is ‘Skilled Trades’. Construction, perhaps? No, because that industry is in for a rude awakening with the pending housing collapse. The referenced jobs vacancy report notes Construction had the highest number of unemployed people for every vacancy (14 to 1). The ‘Skilled Trades’ reference was likely to ‘opportunities’ in Alberta’s mine/tar pits. However, that same jobs vacancy report notes The job vacancy rate in mining, quarrying and oil and gas extraction declined from 3.5% to 1.7% in the 12 months to February. And it’s not for lack of knowledge about those opportunities, so much as young Canadians simply not wanting to work in that field.

While there may be unfilled opportunities for those with ‘Science, Technology, Engineering and Math’ skills, the proportion of the total Canadian labour market high-skill jobs account for is small. This may have something to do with the fact information and telecommunication technology has made it easier in recent years to off-shore high-skill jobs to lower-wage markets (notably India). At the same time, the same federal government’s immigration policy has encouraged Canadian employers to bypass the domestic labour market entirely when recruiting high-skilled workers. The last two points were emphatically highlighted in the recent RBC foreign worker fiasco.

4. In order to STAY COMPETITIVE employers must hire workers with the skills they need. If the skills shortage is not fixed [flag]‘s economy risks FALLING BEHIND (odd CAPS combo)

Perhaps an honest effort in developing a more innovative, productive and diversified economy, one less reliant on the export of dirt and dirt by-products as its main economic driver, and less resources committed to empty rhetoric and sloganeering, would be a better way to address lagging competitiveness.

Update (22/05/2013)

The jobs vacancy data in points 2 and 3 were updated with the May 22, 2013 release (providing three-month moving averages to February 2013)

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