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OECD highlights Canada’s labour mobility barriers

The Organization for Economic Co-operation and Development has weighed in on Canada's skills shortages – and it places most of the blame on a lack of labour mobility.

In a new report on the Canadian economy released Wednesday, the 34-country international economic and social development group included a section on skills shortages that focused much of its criticism on stubborn barriers to worker migration. In short, not enough skilled workers are moving to the regions where their skills are most needed.

"Although already quite high by international comparison, internal migration is impeded by interprovincial barriers, such as occupational licensing," the report said.

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The OECD said Canada's job-vacancy data indicate that vacancy rates for the skilled trades have risen substantially in the past five years, and now exceed science-based occupations – evidence of labour shortages among tradespeople. Those skilled-trade vacancy rates are highest in Alberta and Saskatchewan, evidence that the skills crunch is most acute in specific rapidly growing economic regions.

Yet as ROB Insight reported last week, a Statistics Canada study showed that mobility among these skilled tradespeople has actually been below the overall work force average. In terms of interprovincial migration, workers with only a high-school education are more likely to relocate than highly skilled tradespeople.

The OECD said that despite efforts to harmonize and co-ordinate provincial qualification and certification requirements (such as the interprovincial Agreement on Internal Trade and the national Red Seal program), skilled workers have routinely have had their qualifications rejected by the province to which they want to move. It said the country's Dispute Resolution Panel, set up to address such disagreements over qualifications of skilled workers, has only ever heard two cases – suggesting that the process to resolve qualification barriers "does not appear to be very accessible."

The report also pointed to Canada's Employment Insurance (EI) system as a barrier to the expected natural migration of workers from high-unemployment regions to low-unemployment ones. The OECD said the system of shorter qualification periods and longer benefit periods for seasonal workers in many high-unemployment regions provides an incentive to stay put, keeping workers in regions that can't support the labour force.

The OECD's critique went beyond internal migration; it also noted that Canada's immigration system could use some work. It said the country's economically-based immigration programs don't adequately match immigrant applicants to specific labour-market needs, but it did note that the federal government plans to address this in 2015 with its Express Entry System that will try to better match applicants with employers looking for workers.

Still, it is indeed troubling that some of Canada's biggest impediments to solving its skills shortages are homemade. The historically rooted federal-provincial jurisdictional squabbles that perpetuate these barriers have outlived any usefulness they once had; when our international economic partners raise concerns about our internal dysfunctions, it's high time to consign them to the scrap heap.

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About the Author
Economics Reporter

David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000. A Calgary native, he received a Southam Fellowship from the University of Toronto in 1999-2000, studying international political economics. More

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