Toronto Star – Decoding Canada’s ‘skills crisis’: What’s the solution?

Ottawa has been running a series of TV ads for its Canada Job Grant that makes fixing the country’s unemployment problem look easy.

An actor dressed as a construction worker says he’s been looking for a job for weeks but doesn’t have the right skills for the work available. How can he get more training, he asks.

“With the new Canada Job Grant, the government of Canada will partner with businesses, provinces and territories to help Canadians get the right skills for available jobs,” the announcer says.

The grant is worth $15,000 or more, a printed message notes.

In reality, the solutions to what’s been labeled Canada’s skills mismatch and skills shortage are complex and often controversial.

The public outcry over the alleged misuse of Ottawa’s temporary foreign worker program is just one example of how an apparently well-intentioned program can go terribly wrong.

Designed to help companies quickly fill badly needed high-skilled jobs, the program has been used by fast food outlets in Alberta to fill low-skilled service jobs, and by foreign-based computer companies to help displace Canadian workers.

Ottawa recently revamped the foreign worker program in a bid to close loopholes. But the problem of how to close Canada’s skill gap remains.

It’s been called the country’s greatest economic challenge: An aging population threatens to diminish the size of Canada’s workforce as globalization and technology create a growing pool of unemployed, low-skilled workers and new, high-skilled positions go unfilled.

Or, as education consultant Rick Miner has dubbed it: “People without jobs, jobs without people.”

The demographic trends alone are frightening, Miner says, noting that in less than 25 years, two-thirds of Canada’s population will be either too old or too young to work. If left unresolved, the problem could affect Canada’s ability to compete on the global stage, create a lost generation of young people and threaten our overall standard of living.

Sharing the blame

There is no lack of finger-pointing when it comes to assigning blame.

Business organizations say Canada’s education system needs to do a better job of preparing today’s students for tomorrow’s workforce.

Labour critics say business is doing too little to hold up its end. They cite a Conference Board of Canada report that found business investment in employee training has declined by 40 per cent since its peak in 1993.

And everyone blames a cultural bias that sees parents steering their children away from blue-collar trades despite growing evidence a university degree is no guarantee of a good-paying job.

The federal government is tackling the problem in a number of ways, from redefining immigration policies to encouraging aboriginals, the disabled and other under-represented groups to enter the workforce in greater numbers.

But one of the biggest challenges is developing programs and policies that ensure people get the right education and training. Much of the focus has been on the public education system. But private training is becoming critical as a rapidly changing economy means education doesn’t end with graduation.

At 26, Chris Spoke, of Toronto, understands first-hand the challenges students face in Canada’s post-secondary system.

Spoke, who graduated with a social sciences degree and $26,000 debt load, says students need better information about what jobs are in demand before they enroll.

“A lot of people go into university with no real understanding of how the labour market will react to certain degrees,” he says. “You read that a petroleum engineer is likely to be more employable than an arts graduate. But there’s no real data.”

Since graduating, he’s concluded that university may not be the most cost-effective way to get marketable skills, he adds. He’s outlined an idea for addressing this problem in an ebook called “Arts Majors Need Not Apply.”

Some of his friends got better jobs after taking short courses in computer programming or securities trading from recognized private institutions like the Canadian Securities Institute, he says. Meanwhile, four-year science graduates are working as tellers or going back to school to get a college diploma, he says.

Miner, a former Seneca College president and labour market advisor to the federal government, has documented this trend.

Too many students are taking five years to complete a four-year program, then switching into college or adding a master’s degree. Five or six years later, they finally hit the job market $30,000 in debt with skills that may or may not match what employers want, he says.

The process could be shortened if Canada had better labour market data and if more colleges and universities and apprenticeship programs worked together, he said.

“We need to look at ways of accelerating our programs,” Miner says.

Canada’s education system is good but it could be better, employers say.

“We need to transform our education system and prepare our children for success in Canada and also in a global economy,” Gerald McCaughey, chief executive officer of CIBC, told a recent conference of the Canadian Council of Chief Executives. “Our secondary school system is good, has improved, but does not fit the future.”

The system isn’t turning out enough of the right people and it’s taking too long to do it, businesses say.

Despite employing 365 apprentices, global auto parts maker Linamar Corp. says it had to recruit 50 experienced tradespeople — machinists, electricians and millwrights — from the Philippines last year.

“There just aren’t enough people learning those trades (in Canada), to the point where we’re forced to go abroad and use immigration as a stop gap,” said Linamar president and chief executive officer Linda Hasenfratz.

Hasenfratz points to Germany’s education system as a potential model for Canada. In high school, students are introduced to practical skills, which are then integrated into higher forms of learning.

A high school student might opt to learn carpentry, for example, which gives them a trade but also a foundation for starting their own business or pursuing higher education in a related field, such as architecture.

In comparison, Ontario’s apprenticeship training system doesn’t begin until after high school and has a dismal 50 per cent completion rate. The province has created the self-regulating College of Trades in a bid to improve that performance.

Labour critics agree Germany’s system works, but it’s because employers offer graduates secure jobs at the end of training. In comparison, Canadian students graduate into a workforce where “precarious” short-term, insecure jobs are the norm, says Jim Stanford, economist with the Canadian Auto Workers.

“The German system is amazing. They have 750 identified trades. Almost any career you can imagine. Everyone goes through school and can choose one. Employers are right there to take them as apprentices. And then they get work at the end of it,” Stanford says. “That’s why they’re conquering the export world while Canada is falling further and further behind.”

High anxiety

Canada’s skills gap isn’t just in the blue-collar trades.

Many Ph.D. graduates have trouble finding work in Canada, says Arvind Gupta, a computer science professor at the University of British Columbia.

Canadian universities are pumping out more Ph.D. graduates — nearly 6,000 Ph.D. students a year — in a bid to boost the country’s weak record of corporate innovation.

But too few programs equip graduates to work in the private sector and too few employers realize post-graduate students can offer solutions to real-life problems, Gupta said.

“We need to get more people moving between these two solitudes,” he said.

Gupta said 20 of his 27 Ph.D. students took jobs in the U.S. because the job opportunities were so much better. Instead of writing software for ATMs (a job one recent graduate was offered north of the border), they’re working in large research labs for multinational companies, he said.

The mismatch is one of the reasons Canada is facing a shortage of experienced scientific research managers, he said.

The college system is “pretty nimble” when it comes to meeting employers needs, says Linda Franklin, president and chief executive officer of Colleges Ontario.

When the Ontario government decided to fund more green energy projects, local employers came to some colleges and asked if they could train students to be wind turbine mechanics, she said. In a fairly short time, the colleges put together a curriculum and found some instructors to teach it, she said.

Universities such as Ryerson also say they work with the private sector to develop programs that address labour market needs.

But there’s a risk in offering programs that are too tightly focused on a specific skill set, said Ryerson University president and vice-chancellor Sheldon Levy.

“I think it would be a disaster for a country to define university only as a pipeline to a job,” Levy told a recent conference organized by the Canadian Council of Chief Executives. “By the time you gear up, that job might not exist.”

After school

Students with a post-secondary education still enjoy a higher rate of employment than high-school graduates, educators note.

But education doesn’t end at graduation. In the new, fast-moving, technologically advanced economy, employees need constant retraining. The question is, who should pay for it and how should it be delivered?

Canadian business spending on training has been in decline, slipping another 13 per cent between 2008 and 2010 to an average of $688 per employee, the Conference Board of Canada said in a report called Learning and Development Outlook 2011.

While some large, sophisticated organizations understand the need to invest in their workforce, other companies view it as a cost, said Ruth Wright, director of leadership and human resources research at the Ottawa-based think tank.

Thus, in the current post-recession environment, it was one of the first things that got cut.

“By and large, Canadian organizations are under-investing in learning. There are implications for competitiveness,” Wright said in an interview.

The Canada Job Grant aims to boost the level of on-the-job training. However, the program is far from a slam dunk.

Announced in the May budget, the federal program requires the co-operation of the provinces and territories, which must agree to cede control of $500 million in labour market funding back to the federal government. Quebec has already said it’s opting out.

Employers, who are expected to provide matching grants, welcomed the incentive program, the council of chief executives said. But it’s just a start.

“We need to have a national conversation involving all stakeholders, including students, parents, employers,” CIBC’s McCaughey told a pre-budget skills conference in March. “The competitiveness, prosperity and well-being of Ontario and all of Canada depend on it.”

Fri May 31 2013

Section: Business
Byline: Dana Flavelle