by Canada’s economy lost nearly $13 billion over the past year due to a nationwide labor and skills shortage in the manufacturing sector, a new report has found.
The Canadian Manufacturers and Exporters (CME) annual labor survey of 563 manufacturers in 17 industries across the country found that nearly two-thirds have lost or rejected contracts and experienced production delays due to worker shortages.
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Fines and lost sales resulting from these problems totaled $7.2 billion, according to the organization.
Also, 43 percent of companies have postponed or canceled capital projects due to the shortage, resulting in $5.4 billion in lost investment, CME said.
The pandemic has had long-term effects on the industrial labor market, according to the report – for two years in a row, more than 80 percent of manufacturers reported suffering from labor and skills shortages, compared to 60 percent in 2020. 39 percent in 2016.
The industry was dealing with labor issues before the pandemic, said CME CEO Dennis Darby, but the difficulties increased during the pandemic and have not relented.
“As the pandemic eased from a societal perspective, concerns about labor shortages were as strong as ever,” he said.
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CME Chief Economist Alan Arcand said in the report that two factors are combining to create the shortage: an aging baby boomer group retiring in waves and a lack of interest in jobs among young Canadians.
During the pandemic, more workers retired than usual, said Todd LeRoy, executive vice president of window company Loewen, as immigration slowed.
“Furthermore, in recent months the job market has been very strong and there simply aren’t enough people to fill open positions,” LeRoy said in an emailed statement.
“The birthrate simply cannot keep up with our demand.”
One of the biggest barriers reported by companies was the difficulty of finding workers with the right technical skills – the shortage hits hardest in skilled manufacturing jobs such as welders, machinists and industrial mechanics. Companies also have difficulties filling work or production tasks as well as supervisor or management tasks.
Darby is concerned that the shortage of skilled labor in particular is becoming chronic and that the problem cannot be fixed overnight, as it takes time to learn a trade.
“The pipeline of new entrants has been really, really slow during the pandemic,” said Darby.
He said the industry needs to hire more underrepresented groups, such as women, people of color, indigenous peoples and newcomers.
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More than 70 percent of those surveyed said they would raise wages and benefits to attract and retain employees. However, they also expect help from the government by supporting automation, promoting trade and increasing immigration.
CME is also asking the government to increase the Canada Job Grant and make it permanent, provide tax credits to offset worker training costs and equipment purchases, and speed up the temporary foreign worker program.
The continued shortages have shown that more automation is needed, said Darby.
However, he said that while general labor and manufacturing work, especially repetitive tasks, is ripe for increased automation, it is much less likely to help gaps in skilled trades.
CME represents more than 2,500 companies across Canada, the majority of which are small and medium-sized businesses.
© 2022 The Canadian Press
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