A shortage in the Canadian workforce looms, and it is expected to hit as early as 2012, says the Conference Board of Canada. Increasing the presence of currently underrepresented groups in the Canadian labour force – such as Aboriginal peoples – would alleviate some of the shortfall.
A Conference Board of Canada analysis, however, reveals that even if the rate of Aboriginal participation in the workforce rose to the national average, a significant labour shortage would continue to exist. Higher immigration levels and more effective immigration policies should be viewed as crucial ways to support Canadian economic growth in the medium and long term.
“Bringing more members of currently under-represented groups into our workforce is important for the economy as a whole and to the social and economic prospects for those individuals and communities,” says Glen Hodgson, senior vice-president and chief economist, and author of Sustaining the Canadian Labour Force: Alternatives to Immigration.
“Nevertheless, an increased Aboriginal presence will not by itself resolve the coming decline in Canada’s overall potential economic growth.”
Aboriginal peoples represent a rapidly-growing segment of the Canadian population. If the labour force participation rate among the current Aboriginal population increased to the national average, it would eventually add 46,000 people to the workforce, based on the 2006 census. Achieving this objective would require an array of policy actions that encourage education and skill development, starting with efforts to raise the high school graduation rate among Aboriginal peoples to the national average.
The Conference Board’s long-term economic forecast assumes that immigration levels will reach about 350,000 by 2030, compared to current levels of about 250,000. Even if the number of immigrants increases to this level, significant growth in productivity is required to grow Canada’s potential output beyond 1.7 per cent annually by 2026.