Canada’s skills gap continues to widen, according to study

According to a new study from global recruiting firm Hays PLC, which surveyed the skills gap in 30 developed countries around the world, Canada ranks ninth for the severity of its skills shortage, and its score deteriorated in the past year.

Countries such as Japan, the United States, Germany and Sweden top the list in skilled worker shortage.

Study shows that Canada ranks 9th in the developed world in shortage of skilled workers

The report highlights two key findings

First, the state and the efficiency of a labour market in any particular country is not necessarily driven by the state of the economy in that point in time. Rather, the data suggests through the index that the efficiency of the labour market is driven by more structural factors. That said, the governments can introduce reforms to improve those structural factors, regardless of where they are in the economic cycle.

The second key finding that the index illustrates is that there is a very strong link between the efficiency of an educational system and the ability of that economy to produce the talent that the nation’s industries require both today and in the future. Making sure that business and the educational systems are in sync to produce sufficient numbers of the right quality graduates in the right areas for future talent. That’s the fundamental part of what drives the efficiency in any particular market.

As the global economy recovers and as the Canadian work force continues to age, without a change in policy, the situation in Canada and other developed countries will likely get worse. Canada is falling behind in implementing enough changes to meet the demand for highly skilled migration.

How to improve the skilled worker shortage and avoid disaster in the future

As according to Alistair Cox, the chief executive of Hays PLC, there are three areas where business and the governments can work together to strengthen these labour markets and reduce these inefficiencies that we see in some of these economies:

The first is for the government to foster a business environment of flexibilities, where businesses can build the work force they need for the future. This can be achieved through flexible working arrangements and skilled immigration.

The second method is to make sure that the educational system in an economy are really tuned into what businesses are going to need in the future in terms of the number of right skills.

The third is for businesses to look at their own policy in terms of attracting and retaining staff. Not just younger staff but also retaining and retraining older staff within their own work force.

Immigration Canada making changes

It’s not yet known how effective it will be, however, Canada is working on some changes in the system that are expected to be implemented in late 2014. Last year, Immigration Canada and the provinces, reached an agreement on the future of Canadian immigration system. The system will give the provinces a central role in immigrant selection. This new system will be based on a model called Expression of Interest (EOI).

The EOI model is an immigrant selection process which requires those seeking to immigrate to first file a simplified application, with immigration authorities. From that pool of applicants, the most promising candidates, based on the immigration department’s selection criteria, are then selected, and invited to submit a full application which includes documentation to prove their claimed qualifications.

Canadian Government Celebrates First Skilled Trades Immigrant

Citizenship and Immigration Minister Chris Alexander welcoming one of the first successful Federal Skilled Trades Program applicants (Citizenship and Immigration Canada)

New Canadian Citizenship and Immigration Minister Chris Alexander this month welcomed Eric Byrne, a Canadian immigrant from Ireland, and one of the first individuals to become a permanent resident of the country through the Federal Skilled Trades Program (FSTP), in a press conference to promote the new immigration program.

Describing the program’s connection to the Canadian government’s broader economic goals, Alexander said:

“Our Government remains focused on job creation, economic growth and long-term prosperity. The new Federal Skilled Trades Program enables us to attract and retain skilled workers—like Eric—so we can address regional labour shortages and strengthen Canada’s economy.”

Byrne met the FSTP’s first requirement, a Certificate of Qualification from a provincial trades authority – in his case the Ontario College of Trades – in May 2012, and is currently employed as a plumber for University Plumbing and Heating.

He initially entered Canada through the country’s working holiday program, called International Experience Canada.

The reciprocal visa program allows the young adults of countries that Canada has a working holiday agreement with, like Ireland, to work and live in the Canada for a period of one to two years, while Canadian youth are given the same opportunity in the contracting country.

The program grants a maximum of 6,350 two year working holiday visas to Irish permanent residents and citizens per year. The visas have become highly sought after in Ireland, with the annual quota being met just two days after the program began accepting applications in 2013.

Part of new immigration selection strategy

The increasing reliance on the International Experience Canada program, the Canadian Experience Class (CEC), and new immigration programs that target foreign nationals with skills in demand in Canada, like the FSTP, for selecting new immigrants, began during Jason Kenney’s tenure as Citizenship and Immigration minister.

The aim of this new direction in immigration selection is to reverse the trend seen of highly educated immigrants arriving in Canada and having difficulty integrating into the economy, resulting in a growing employment and income gap between new immigrants and the general population.

By choosing applicants from countries more similar in language and economic structure to Canada, those who have Canadian work experience, and those who are certified to work in their vocation in Canada, the immigration ministry hopes new immigrants can immediately start contributing to the Canadian economy at the same rates as native born Canadians.

For his part, Kenney, who is now the Minister of Employment and Social Development, welcomed another one of the first successful applicants of the FSTP, Paul Lyttle, who is working as an electrician for Calgary-based Unitech Electrical Contracting Inc.

He promoted the program as a positive for the Canadian economy.

“The new Federal Skilled Trades Program is a significant improvement to Canada’s immigration system which, for too long, had not been open to in-demand skilled workers. Immigrants like Paul are set for success and I am pleased that this new Program will enable him, and others like him, to contribute skills to our economy on a permanent basis,” he said.

Canada to Encourage Irish Immigration at Jobs Expo Dublin and Jobs Expo Cork

A street in Dublin, Ireland. Thousands of Irish job seekers are expected at the job expos being held in Dublin and Cork on September 6, 7 and 10 (Jean Housen)

At least seven Canadian companies will have a presence at this year’s Jobs Expo Dublin and Jobs Expo Cork, where they will promote the country as an ideal destination for Ireland’s skilled workers to find work and to settle.

The job expo, which is scheduled for Friday September 6th and Saturday 7th in Dublin, and Tuesday September 10th in Cork, will attract thousands from across Ireland seeking to assess the employment opportunities being offered. Dozens of companies from around the world will be manning booths at the event.

With Ireland now back in recession, immigration to Canada is becoming an increasingly attractive option for the country’s workers, whose skills, including English fluency and many with skilled trades qualifications, are well matched for Canada’s economy.

Among Canadian firms present at the expo will be CICS Immigration Consulting, which will be holding seminars on immigration to Canada in Dublin on Friday September 6th from 3pm – 3.45pm and in Cork on Tuesday September 10th from 5pm – 5.45pm.

Canadian immigration consultant and CICS principal Alex Khadempour will detail the main routes through which Irish workers can obtain work permits and permanent residency in Canada and provide a layout of the Canadian labour market and what immigrants might expect to encounter when they arrive in the country.

The job expo will run from 11am to 4pm in the Croke Park Conference Centre in Dublin and from 12pm to 6pm in the Silver Springs Moran Hotel in Cork.

Increase in US Oil Production Threatens Canada’s Oil Sands

An oil rig in Northern British Columbia. The oil and gas industry is vital to the economy of Western Canadian provinces

Canadian energy producers exported over $120 billion worth of energy products in 2011, which constituted over 25 percent of the $462 billion worth of goods/services exported from Canada that year.

The sizeable contribution made by the oil and gas sector to Canada’s export revenue helped shore up the value of the Canadian dollar, which enhanced Canadians’ purchasing power internationally and helped raise the average household wealth of Canadians above that of Americans for the first time in history.

Canada’s natural resource wealth, in particular in energy resources, has also given it the best economic performance among the G8 countries over the last several years, and allowed it to better weather the economic decline following the bursting of the global credit bubble in 2008.

The exceptionalism of Canada among the developed world faces a threat from an unexpected source though: increasing shale oil production in the US.

As noted in the Edmonton Journal, a recent PricewaterhouseCoopers (PwC) report projects a substantial increase in global oil supplies as new oil extraction methods like hydraulic fracturing make previously inaccessible shale oil reserves accessible for the first time:

Thanks to such innovations as horizontal drilling and fracking (hydraulic fracturing), the U.S. is currently producing more oil than it has in 20 years. U.S. output now exceeds seven million barrels a day, and that has enabled the world’s biggest oil consuming nation to cut its imports to the lowest level in 16 years.

Since Canada’s crude oil exports are a critical driver of well-paid jobs, royalties, taxes — and ultimately, federal equalization transfers — that’s something that should alarm all Canadians.

Indeed, if current trends continue, the U.S. will overtake Saudi Arabia as the world’s top oil producer by 2017, the International Energy Agency has predicted.

This can threaten Canada’s energy sector due to both global and regional effects. Globally, an increase in oil production would reduce oil prices, and with it, Canada’s oil and gas revenue. Regionally, given ninety percent of Canada’s energy exports are sent to the US, an increase in American oil production would significantly reduce the premium Canadian oil producers receive thanks to the proximity of their major buyers.

The regional effects could be alleviated with the construction of more pipelines capable of transporting the oil produced in the Athabasca oil sands in Northern Alberta to the Pacific Ocean, from where it can be shipped to Asian economies, but projects being proposed at the moment, like the Enbridge pipeline, face political challenges due to ideological and cultural opposition to the oil industry among a sizeable section of the Canadian public.

Economic repercussions

If the global petroleum market progresses as the PwC report predicts, the prosperity of Canada’s Western provinces, which depends to a large part on energy production, would diminish, and federal revenues from oil and gas royalties would decline.

The rapid immigration of skilled trades people to Canada to work in the oil and gas sector would slow, and other developed countries, especially large oil importers like European countries and Japan, would become more attractive destinations for immigrants and international investors.

The net effect for the world would likely be positive, as reduced oil prices increase global economic growth and raise the average of standard of living around the world.

Immigrant Income Levels Depend on Canadian Immigration Program

Data from the Statistics Canada report on the income of immigrants, released in December, shows large differences in the economic performance of immigrants depending on which immigration program they were admitted through (Moxy)

In the second part of our series on the recently released Statistics Canada report on the income of immigrants, we delve deeper into the data and look at how various economic class immigration programs compare for immigrants who arrived between 1986 and 2010. The first part can be found here.

Among the most important immigration-related issues for the federal government every year is picking the right mix of immigration programs to make up the annual quota that it sets aside for new permanent residents.

The major priorities that the federal government seeks to meet in selecting the allocation are:

  • meeting the humanitarian commitments it has set for itself to re-settle a certain portion of the world’s refugees
  • accommodating Canadians whose family members live abroad and who they would like to re-unite with through family class immigration sponsorship
  • admitting immigrants that will contribute to Canada’s economy and meet its investment and labour needs

To meet the last objective, the federal government currently allocates 60 percent of the permanent residence quota to economic class immigration programs, which consist of the Federal Skilled Worker Class (FSWC), the Canadian Experience Class (CEC), the business class programs, and the provincial nominee class programs.

Historically, the skilled worker program (FSWC) has contributed the largest portion of Canada’s economic class immigrants, but there have been calls to increase the proportion admitted through programs in the business and provincial nominee classes.

The provincial governments in particular have frequently called on the federal government to allow them to pick a greater share of Canada’s immigrants through their respective provincial nominee programs (PNPs), which has resulted in their quotas being increased from 2,500 in 1999, to over 30,000 in 2009.

Whether the FSWC should remain the mainstay of Canadian economic-class immigration or whether the PNPs, or perhaps business class programs, should continue to see their role expanded, is a question that the StatCan report can help answer.

The 30 year longitudinal study (we have only reproduced 24 years of it, as we assessed the data from 1980-1986 to be too limited to be useful) has a few surprising findings.

Income of immigrants by immigration program. Skilled worker class immigrants see the most wage growth over the 24 year period.

Early success for PNP immigrants, long-term success of the skilled worker class immigrants

Immigrants admitted through the FSWC earn significantly more than those admitted through the business classes, and after seven years in Canada, more than PNP class immigrants.

Average income in 2010 for skilled worker class immigrants. The graph shows rapid income gains in the first few years following immigration, followed by more gradual income growth

PNP-class immigrants earn nearly double what other immigrants earn in the first year of their permanent residence. This is most likely due to the fact that a person needs to already be in Canada and working to qualify for most provincial nominee programs, whereas immigrants who become permanent residents through the FSWC or business class programs arrive in Canada for the first time on the day they receive their permanent residency.

The data shows that the PNPs’ lead in income quickly closes, as FSWC immigrants see rapid income gains in their first few years in Canada.

Average income in 2010 for provincial nominee (PNP) class immigrants. PNP-class immigrants start out with much higher incomes than other economic-class immigrants

It should be taken into account however that the data on PNP-class immigrants that arrived in the early 2000s is quite limited, given the provincial nominee programs admitted fewer than 10,000 immigrants for most of the first of half of the 2000s, so the long term income growth statistics for the PNP class could change over-time.

Poor performance of business class immigrants

The business class immigrants, despite having met demanding minimum net worth requirements to qualify for immigration to Canada, have lower income levels than skilled worker and provincial nominee class immigrants, especially in the first few years after they arrive.

Over the long run, their income gradually converges with the skilled worker class, but this takes nearly 24 years and it never meets the level of their skilled worker counterparts.

One partial exception to this is immigrants from the Africa and Middle East region. Business class immigrants in this group see their income surpass skilled worker class-immigrants from the same region after 24 years.

Average income in 2010 for business class immigrants. Business class immigrants from the Africa and Middle East region see significant income growth over a 24 year period

Cause of business class under-performance

Ideally, business class immigrants, with their substantial capital and business experience, would be the biggest contributors to the Canadian economy among the country’s immigrant population.

One possible explanation for their lower than expected incomes is that they keep their investments abroad.

Canada, which has relatively high average personal income tax rates, is out-matched in investment opportunities by many regions in the world, like the rapidly developing Asian country of South Korea, which has average personal income tax rates and government expenditure levels that are one third lower than Canada.

While business-class immigrants could choose to remain invested abroad, skilled worker class immigrants likely benefit from working in Canada, since it is a high-income country that provides better wages than the vast majority of the world, and in any case they have few options other than working and earning their salary in Canada, since labour is not mobile like capital.

If investment opportunities in Canada being comparatively poor is in fact the cause of lower than expected income performance of business class immigrants, this is not a problem that the federal government can fix by changing immigration selection rules.

Report Projects Oil Sands to Contribute Trillions to the Canadian Economy

The Deloitte report says pipelines are the most efficient way to transport oil produced in Western Canada

A comprehensive report on the challenges and opportunities of Canada’s oil sands by auditing giant Deloitte projects that the hydrocarbon deposits will contribute an estimated $2.1 trillion to Canada’s GDP over the next 25 years.

The economic benefits of the added wealth include up to $783 billion in extra tax revenues over the period, which will provide a significant boost to local, provincial and federal governments and help them meet the growing costs of providing social services to an ageing population.

In addition to tax revenue, the export revenue generated from oil sands production will fund up to 905,000 jobs a year according to the Deloitte report.

The report cites lack of pipeline infrastructure as a potential limiting factor in the growth of Canada’s energy exports, as oil production is expected to reach current pipeline capacity by 2017.

Oil producers are currently look to use alternative transportation methods, in particular rail transport, to move the oil to international markets once pipeline capacity has been reached, but these solutions are expensive and inefficient in the long run, and the report says more efficient pipeline transportation will be required to fully realize the oil sands’ potential.

The report mentions the Northern Gateway pipeline, the Keystone XL pipeline and the Trans Mountain Expansion (TMX) as three pending infrastructure projects that are critical for providing sufficient conduits for getting Canada’s oil sands production to world markets.

According to Deloitte, the benefits of completing these projects include: 1) reducing up to $131 billions in losses that are currently incurred from Canadian oil being sold at below market prices due to lack of access to world markets, 2) reducing over-reliance on the US market, and 3) getting access to the fastest growing oil consuming regions of the world in India and China.

The biggest challenge in the oil sands development according to the report is the poor public perception of the oil industry in Canada and the hyperbolic nature of the debate surrounding the potential environmental harm of oil pipelines. The report urges a more fact-based debate on the costs and benefits of pipeline construction that avoids broad generalizations and sweeping judgements about environmental criticism, the oil industry, and energy projects.

New Canadian Immigration Program for Skilled Trades Opens

The Federal Skilled Trades Program was launched on Wednesday to acclaim from construction industry leaders

Citizenship and Immigration Canada (CIC) officially launched the Federal Skilled Trades Program (FSTP) on Wednesday, and plans to admit up to 3,000 permanent residents through the program in 2013.

Applicants of the FSTP must meet three general requirements to be eligible for the program:

  • meet the minimum language requirements of the program,
  • have at least two years of full-time work experience (or an equivalent amount of part-time work experience) in an accepted skilled trade within five years of the date of the application,
  • have a Certificate of Qualification or a job offer(s) from up to two Canadian employers that totals at least one year of full time work

Construction industry leaders have welcomed the program, which they say could mitigate the pressing labour shortages they are facing in many of the trades.

“Today’s announcement is good news for the construction industry because the need for workers with trade skills will continue to grow as Alberta’s economy grows,” said Merit Contractors Association in Alberta vice-president Bill Stewart.

Canadian Construction Association president Michael Atkinson had similar praise for the program:

“The Canadian Construction Association is especially pleased to hear today’s announcement that the new federal Skilled Trades Program to be launched on January 2nd, 2013.”

In order to make it easier for skilled trades persons to immigrate to Canada, CIC created the FSTP with no post-secondary education requirements and lower language proficiency requirements than the well-known Federal Skilled Worker Program.

Canadian Immigration Department Finalizes Occupation List for Federal Skilled Trades Program

Welders will be one of the occupations that will be accepted without a 100 application sub-cap under the new Federal Skilled Trade Program (Joe Mabel)

CICS News has learned that Citizenship and Immigration Canada (CIC) has made a final decision on which occupations will be eligible for the new Federal Skilled Trades Program (FSTP) that is scheduled to open on January 2nd.

CIC is expected to announce that the FSTP will give occupations one of two treatments; Group A occupations will be sub-capped at 100 applications per year for that particular occupation, and Group B occupations will have no sub-cap and will be accepted until the program’s total cap of 3,000 applications has been reached for the year.

Occupations within Group A will be:

  • Contractors and supervisors in electrical trades and
    telecommunications occupations
  • Contractors and supervisors in carpentry trades
  • Contractors and supervisors in other construction trades,
    installers, repairers and servicers
  • Carpenters
  • Contractors and supervisors in mechanic trades
  • Contractors and supervisors for heavy equipment operator
    crews
  • Supervisors in logging and forestry
  • Supervisors in mining and quarrying
  • Contractors and supervisors in oil and gas drilling services
  • Logging machinery operators
  • Agricultural service contractors, farm supervisors and
    specialized livestock workers
  • Supervisors, mineral and metal processing
  • Supervisors in petroleum, gas and chemical processing
    and utilities
  • Supervisors in plastic and rubber products manufacturing
  • Central control and process operators, mineral and metal
    processing
  • Power engineers and power systems operators
  • Water and waste treatment plant operators

Occupations within Group B will be:

  • Machinists and machining and tooling inspectors
  • Sheet metal workers
  • Structural metal and plate work fabricators and fitters
  • Ironworkers
  • Welders and related machine operators
  • Electricians (except industrial and power system)
  • Industrial electricians
  • Power system electricians
  • Electrical power line and cable workers
  • Telecommunications line and cable workers
  • Telecommunications installation and repair workers
  • Plumbers
  • Steamfitters, pipefitters and sprinkler system installers
  • Gas fitters
  • Construction millwrights and industrial mechanics
  • Heavy-duty equipment mechanics
  • Refrigeration and air conditioning mechanics
  • Railway carmen/women
  • Aircraft mechanics and aircraft inspectors
  • Elevator constructors and mechanics
  • Crane operators
  • Drillers and blasters — surface, mining, quarrying and
    construction
  • Water well drillers
  • Underground production and development miners
  • Oil and gas well drillers, servicers, testers and related
    workers
  • Petroleum, gas and chemical process operators

The FSTP is intended to meet labour shortages in Canada’s resource sectors by creating a path to immigration for foreign nationals skilled in high-demand trades like welding and drilling.

Canada’s New Federal Skilled Trades Program to Launch January 2nd

Heavy duty equipment mechanics, whose skilled are in demand in Canada’s resource hubs, will be eligible for permanent residence through the new Federal Skilled Trades Program (Jorge Rodriguez)

Citizenship and Immigration Canada (CIC) announced on Monday that the new Federal Skilled Trades Program (FSTP) will be launched January 2nd, 2013.

The new program will admit applicants with qualifications in a skilled trade occupation that is in demand by Canadian employers, including electricians, welders, heavy-duty equipment mechanics, and pipefitters. The final list of eligible occupations is still being compiled by CIC with consultation with the provincial governments and will be announced before the January 2nd launch date.

“For too long, Canada’s immigration system has not been open to these in-demand skilled workers. These changes are long overdue and will help us move to a fast and flexible immigration system that works for Canada’s economy,” said Citizenship and Immigration Minister Jason Kenney.

According to CIC, eligible applicants will meet the following four requirements:

  • have an offer of employment or a certificate of qualification from a provincial or territorial apprenticeship authority
  • meet minimum language proficiency requirement, which will be lower than that of the Federal Skilled Worker Program (FSWP)
  • have a minimum of two years of work experience in an eligible trade occupation
  • have the skills and experience found in the National Occupational Classification (NOC B) for an eligible occupation

The new program will have a quota of 3,000 in 2013, after which applications will no longer be accepted.

The new immigration stream was praised by Michael Atkinson, President of the Canadian Construction Association, who joined Mr. Kenney on Monday for the announcement of the program’s launch: “The new program ensures greater consideration is given to the needs of industry when processing eligible immigration applications.”

Federal, Provincial Governments Reach Agreement on Future Canadian Immigration System

Provincial immigration ministers met over two days in Toronto last week to discuss details of the new Expression of Interest (EOI) immigration system (Citizenship and Immigration Canada)

Canada’s federal, provincial and territorial (FPT) governments concluded two days of meetings on Friday with an agreement on the future of Canada’s immigration system which will give the provinces a central role in immigrant selection.

On the agenda for the FPT immigration ministers were the details of the upcoming Expression of Interest (EOI) model for the Federal Skilled Worker (FSW) program, which Citizenship and Immigration Canada (CIC) is planning to implement by the end of 2014.

The EOI model is an immigrant selection process which requires those seeking to immigrate to first file a simplified application, or “Expression of Interest”, with immigration authorities.

From that pool of applicants, the most promising candidates, based on the immigration department’s selection criteria, are then selected, and invited to submit a full application with includes documentation to prove their claimed qualifications.

The EOI model was first adopted by New Zealand and then more recently by Australia. CIC believes it holds the promise of eliminating the application back-logs that have plagued Canada’s immigration department over the last decade while admitting immigrants with the language, education, age and skill profiles needed to be successful in the Canadian labour market.

The FPT meeting, which was attended by all provincial and territorial immigration minister with the exception of the immigration minister of Quebec, gave unanimous approval for an EOI model for Canada in which provinces and employers select the most promising candidates from the list of EOI applicants, who are then selected to be among the limited number of applicants to be invited to submit a full application.

Co-Chairing the FPT Meeting was Alberta Minister of Enterprise and Advanced Education, Stephen Khan, who voiced the provincial ministers’ support for the plan:

“On behalf of the provinces and territories, we look forward to continuing our work with the Government of Canada to transform the immigration system, making it faster and more responsive to provincial/territorial needs.”