BUSINESS

What Labour Shortage? Canada Has A Record Low Number Of Job Vacancies

03/19/2014 11:59 EDT
Gary Waters via Getty Images

The Harper government and some business groups have long argued that the Temporary Foreign Worker (TFW) Program is necessary to keep businesses running, given Canada’s supposedly dire labour shortage.

But the latest data on job vacancies from StatsCan puts a serious crimp in that argument.

There were 200,000 job vacancies across the country, a decline of 21,000 from the previous December, StatsCan reports, marking the lowest number of job vacancies on record.

Granted, StatsCan has only been tracking this data since 2011, and there were likely periods with fewer job vacancies in recent recessions. But the numbers suggest all the same that Canada’s job market is in a rough patch.

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Job Vacancy Ratios By Province

And BMO chief economist Doug Porter says the numbers cast serious doubt on the notion that Canada is suffering from a labour shortage — the main argument used by the government and others to push for the continuation of the controversial TFW program.

We have long been skeptical that labour shortages are a major problem in Canada, aside from some sectors in Alberta and perhaps Saskatchewan. The latest job vacancy figures cast further doubt,” Porter wrote in a client note.

“If there were truly pressing shortages, one would expect to see job vacancy tallies grinding higher as the jobless rate trends down, especially in some skilled trades sectors. Just the opposite has unfolded in the past year.”

There are now 6.3 unemployed people per job vacancy, up from 5.7 unemployed people per vacancy a year earlier, StatsCan’s data shows. The number of unemployed people has stayed stable, at 1.2 million, over the past year, but the number of jobs available has shrunk, causing the ratio to go up.

Even in Alberta and Saskatchewan, the number of job-seekers per job is increasing. There were 2.4 job-seekers per job in Saskatchewan in December, up from 2.1 in August, 2012. In Alberta, there were 2.3 job-seekers, up from 1.7 in August, 2012.

The Harper government recently reformed the TFW program in the wake of a controversy about RBC workers being laid off and replaced with temporary foreign workers. The new rules eliminate a fast-track for the program, and eliminate employers' ability to pay TFWs as much as 15 per cent less than the prevailing wage.

Some business groups objected to the reforms, arguing that making it harder to bring in temporary foreign workers would harm business.

"We have tens of thousands of members across Canada struggling to find workers, particularly in rural communities where there are few young people, and now their access to the Temporary Foreign Worker Program is severely limited because of abuses by large corporate bad apples," the Canadian Federation of Independent Business said.

The group called it "the worst decision for business since the Harper government took office in 2006.”

But despite the reforms, evidence continues to mount that the TFW program is being used by companies to replace existing Canadian workers with foreign ones — something that is not allowed under the rules.

The Alberta Federation of Labour (AFL) recently objected when 65 ironworkers were dismissed from an Imperial Oil oilsands project and replaced with foreign workers who reportedly half as much as the Canadian ones.

The contractor who employed the workers said the Canadians would be rehired, but the AFL doubted this would happen.

Alberta and Saskatchewan, the two provinces identified by BMO’s Porter as having potentially genuine labour shortages, have been pushing the federal government to open the country to more temporary foreign workers.

But given Prime Minister Stephen harper’s recent comments that the program has been “overextended” and has been abused by some companies, it seems there is little appetite for an expansion.