Atlantic Canada will feel the effects of an aging population and greater labour shortages sooner and harder than the rest of the country, says a new study by the Canadian Federation of Independent Business.
The study, called The Future of Atlantic Canada: Dealing with the Demographic Drought, was written by the federation’s Amelia DeMarco and Bradley George, its provincial affairs director, and included survey results from 1,500 small business owners in the region, plus Statistics Canada data.
“Atlantic Canada’s population is aging faster than any other region in Canada. It has the lowest fertility rates in the country, attracts the smallest share of Canadian immigrants, and has the highest out-migration rates in Canada,” the report says.
In the survey, more than 73 per cent of respondents said the biggest challenges ahead over the next five years for small to medium-sized companies will be a shortage of qualified labour, loss of young workers to other provinces and an aging workforce.
“Atlantic Canada’s challenge won’t be to find jobs for people, but to find people for jobs, and taxpayers will also find themselves paying for growing health and social services bills,” explained Leanne Hinchey, business federation’s vice-president of Atlantic Canada.
“We haven’t yet seen the signs that our region is changing its focus from the former to the latter.”
“Many small business owners are doing their part to attract and retain talent by increasing wages, offering greater flexibility at work, and providing employees with training and advancement opportunities,” said Hinchey, adding that “now is a critical time for Atlantic governments to be proactive about the region’s changing demographics.
“Business owners are looking for their governments to partner with them to find real solutions.”
New figures from the business group suggest that since 2004, the long-term job vacancy rate has increased to almost five per cent from three per cent.
That means more jobs are remaining vacant for at least four months or more and it means employers are experiencing increasing problems with finding qualified candidates to fill vacancies, even at entry-level jobs.
Half of all Atlantic Canadian firms represented by the federation say they’re concerned about the labour shortage.
The report quotes another recent study from the Atlantic Institute for Market Studies which predicts that by 2016, the number of available workers will be smaller than the number of available jobs and that by 2026, 12.5 per cent of jobs in Nova Scotia will go unfilled.
A similar report by the Policy Research Centre at the University of New Brunswick predicts that the labour force in this province will start to decline by 2011.
While some employers say they need workers with skill sets such as carpenters or mechanics, more than half of business owners surveyed said they’re looking to fill positions that don’t require post-secondary education and are entry-level jobs.
The study found that Atlantic Canada is still not attracting its fair share of immigrants. In 2007, about 83 per cent of immigrants settling in Canada found homes in Ontario, Quebec or British Columbia. Just 2.4 per cent or 5,706 immigrants settled in Atlantic communities in 2007.
Compared to the national average of 22 per cent, only 10 per cent of small business owners in Atlantic Canada had hired a new immigrant in the past few years.
“This suggests that business attitudes towards hiring immigrants need to change in Atlantic Canada. Employees must consider immigration as a viable option to address their skill and labour shortages,” the report said.
The Canadian Federation of Independent Business says New Brunswick and its sister Atlantic governments must do a better job of match-making immigrants to jobs in the small business sector, create incentives and reward workplace training and adopt a co-operative approach to facing demographic challenges.
The larger the firm, the more apt owners are to employ strategies to hire younger workers, highlighting the need to make hiring and training strategies more easily accessed by smaller companies.
It suggests, for instance, that there be a regional training tax credit and that apprenticeship ratios be hiked to competitive levels.
The business federation continues to call for governments to reduce red tape and cut the provincial tax burden in Atlantic Canada.
On a positive note for New Brunswick, the federation says it had the second most small business-friendly provincial tax system in the country according to another 2009 report