CME releases annual labour survey showing that labour shortages are destroying the economy

TORONTO — On Oct. 25, Canadian Manufacturers & Exporters (CME) released its annual labour survey showing that labour and skills shortages are harming the Canadian economy. In the last year alone, CME says these shortages have resulted in economic losses totalling nearly $13 billion, a figure calculated from the responses of 563 manufacturers from across 17 industries in Canada.

According to their data, over the past year, 62 per cent of manufacturers have lost or turned down contracts and faced production delays due to a lack of workers, resulting in $7.2 billion in lost sales and penalties for late delivery. At the same time, 43 per cent of companies have postponed or cancelled capital projects because of labour shortages, corresponding to $5.4 billion of lost investment.

“Our survey confirmed what we’ve been hearing from manufacturers on the ground for a long time. Labour and skills shortages are a chronic and persistent issue for manufactures, and they continue to limit the growth prospects of the sector. If we don’t find the workers we need, Canada’s economy will suffer”, said Dennis Darby, President and CEO of CME.

Here are some of the survey highlights:

Shortages: The Needs are Immense

• The ongoing challenge of labour and skills shortages continues to be exacerbated by the fallout from the pandemic. For the second consecutive year, more than 80 per cent of manufacturers reported facing labour and skills shortages, up sharply from 60 per cent in 2020 and 39 per cent in 2016.
• Shortages are most acute in production-related jobs, and manufacturers continue to have trouble finding enough highly skilled workers to fill skilled trade occupations and other workers to fill general labour and assembly positions.
• Eight-in-ten manufactures say labour shortages in related sectors, like transportation and logistics, are also negatively affecting their business.

Real Business Impacts

• The survey identified the biggest negative impacts of labour shortages on the manufacturing sector: delivery delays, increased costs, and mental health impacts on current employees.
• 15 per cent of manufacturers are considering moving some or all their production outside Canada due to a lack of workers.

Action is Needed

• More than 70 per cent of survey participants have responded to labour shortages by increasing wages and benefits.
• Manufacturers are calling on governments to provide more support to encourage automation, do more to promote skilled trades to secondary students, introduce and expand apprenticeship programs and incentives, and increase the intake of immigrants.

CME chief economist Alan Arcand said in the report that two factors are combining to create the shortage: an aging cohort of baby boomers retiring in waves, and a lack of interest in manufacturing jobs from young Canadians.

During the pandemic, more workers retired than usual, said Todd LeRoy, vice-president of window company Loewen, while immigration was held back.

“As well, the last few months has seen a very strong job market and just not enough people to fill open positions,” said LeRoy in an emailed statement to the Canadian Press.

“The birth rate simply cannot keep up with the demand we have.”

One of the biggest barriers companies reported was a difficulty finding workers with the right technical skills — the shortages are hitting the hardest in skilled production jobs, such as welders, machinists and industrial mechanics. Companies are also having trouble filling positions in general labour or production, and supervisory or management roles.

Darby says the sector needs to hire more underrepresented groups, such as women, people of colour, Indigenous people and newcomers.