Labour shortages in Canada are, in part, due to the strong demand for workers generated by robust economic growth here and around the world. Real gross domestic product (GDP) is expected to grow globally and in Canada by 3.9% and 2.0%, respectively, in 2018. The expansion should continue into 2020, spurring continued healthy demand for workers.
On the supply side, the growth of Canada’s workforce has fallen since 2000 and, despite a recent bump, the downward trend is expected to continue. The labour shortage is in decline as a result of the large baby-boom generation heading to retirement. Although immigration should ease the situation, growth in Canada’s workforce is expected to stay close to zero in the years ahead.
Close to 40% of small and medium-sized businesses are already having difficulty with labour shortages, according to our survey. Figure 1 shows Canada’s labour force growth rates since 2000 and projected growth rates to 2030. Notice that the growth rates are expected to remain below 0.2% for the next decade.
The bottom line: Don’t expect labour shortages to get better.
About the contributorS:
The findings in this study are based on a BDC survey of 1,208 entrepreneurs. The survey asked the owners of small and medium-sized businesses a series of questions to assess the impact of labour shortages on their company. They also conducted eight telephone interviews with entrepreneurs to better understand the impact of labour shortages.
BDC is the only bank devoted exclusively to entrepreneurs. It promotes Canadian entrepreneurship with a focus on small and medium-sized businesses. With its 123 business centres from coast to coast, BDC provides businesses in all industries with financing and advisory services. Its investment arm, BDC Capital, offers equity, venture capital and flexible growth and transition capital solutions. BDC is also the first financial institution in Canada to receive B Corp certification.