Bring on the skilled workers and sharpen the competitive edge

Last month, I wrote about the long-standing competitiveness gap between Canada and the United States and how it has accelerated, with U.S. productivity in 2010 growing more than three times faster than Canada's.

Last week, Globe and Mail reporter Tavia Grant examined the devastating impact of Caterpillar Inc.'s decision to close its Electro-Motive Canada plant in London, Ont., and move the jobs to Indiana. The move throws some 700 Canadians out work and has a direct impact on at least a thousand more who provided materials and services to the plant. This is the latest, and possibly the most wrenching, of Southwestern Ontario plant closings, including Ford Motor Co.'s St. Thomas plant last year.

And earlier this month, the Canadian Chamber of Commerce issued a report, "The Top 10 Barriers to Competitiveness," which highlighted a "desperate labour shortage" as the No. 1 obstacle to growth of Canadian companies.

How can manufacturing layoffs and an unemployment rate of more than 8 per cent in six provinces, including Ontario and Quebec, be reconciled with this "desperate" shortage? As the CCC report makes clear, rather than an overall shortage of workers, the real problem is a skills crisis. The retraining of laid-off workers from shrinking industries, such as manufacturing, to work in fast-growing sectors is crucial to resolving this skills crisis.

"A more highly skilled work force will produce value-added goods and services and new technologies that can maximize productivity and improve the quality of life for all Canadians," the report stresses in its key theme.

Given the shortage of skilled workers, and the pending retirement of thousands more across the country, Canadian businesses and governments should view every person as potential contributor to the work force. With that in mind, improving immigrant integration services should be a high priority. Many immigrants gain entry to Canada on the basis of needed skills yet languish in low-skill jobs due in part to the lack of national standards for assessing qualifications.

Another way to ease the skills shortage is to dismantle barriers that prevent people from working to their highest level. Examples of recent progress include allowing nurse practitioners to take on some the work of doctors; enabling pharmacists to write prescriptions; and letting certified technologists handle some aspects of engineering work.

Perhaps the biggest challenge, and the biggest opportunity, lies in what the report calls "connecting education and employment." As CCC president Perrin Beatty said: "We want to encourage people to look more at science, engineering, the skilled trades … All of those areas are high-growth for us."

Human Resources and Skills Development Canada cites national labour shortages in almost all areas of health care, the oil and gas sector, and information technology; manufacturing and low-skilled service occupations are among those in long-term surplus supply. And the Ottawa-based Information and Communications Technology Council has warned of an "alarming" shortfall in meeting the expected demand for 106,000 new technology workers in the next five years.

With such clear evidence about the importance of skilled training for the country's economic future, one would think Canadian universities would be at the forefront in matching education to employment. But Organization for Economic Co-operation and Development data show that while Canada has one of the world's highest rates of university attendance, our schools rank second-worst in producing graduates able to find "high skill level" employment. And every year, thousands of qualified applicants are turned away from faculties of engineering, medicine and other skills-short fields due to lack of capacity.

Given the sclerotic inertia of faculty associations that compels our taxpayer-financed universities to ignore both the needs of the country and the future of their students, provincial governments should force allocation of program dollars to where the jobs are.

The CCC report is both a wakeup call and a clear road map to maintaining Canada's privileged living standards in a competitive world. As Mr. Beatty said, "The need for action is urgent … The stakes have never been higher."