Job vacancies fall to lowest point on record

The case for job shortages in Canada became thinner Tuesday with the most recent data showing vacancies actually fell to 200,000 at the start of the year, meaning there were 6.5 unemployed workers chasing each opening.

'Strikingly low' numbers undermine claims of widespread labour shortages

Despite falling job vacancy numbers, labour shortages do exist in certain occupations, says TD Bank chief economist Craig Alexander. They are just not as widespread as some have implied. (Mark Blinch/Reuters)

The case for job shortages in Canada became thinner Tuesday with the most recent data showing vacancies actually fell to 200,000 at the start of the year, meaning there were 6.5 unemployed workers chasing each opening.

Statistics Canada said the total number of job vacancies for January, down by 22,000 from a year earlier, was at its lowest since the agency began collecting data in March 2011. The 6.5 ratio was the second highest, only bettered during that initial month.

The fresh data is just the latest indicator that seems to undercut government and business arguments that Canada is facing a serious skills and labour shortage.

To address the problem, Finance Minister Jim Flaherty last month made the issue a major pillar of his budget, announcing that Ottawa would become more directly involved in how $500 million for skills training is spent.

The initiative would establish a $15,000 grant per person — paid equally by Ottawa, the provinces and employer — for training for specific vacancies.

Vacancies 'strikingly low'

As well, Canada has seen a ballooning of foreign temporary workers for vacancies employers say they cannot fill.

"This is a strikingly low job vacancy number, and it really casts doubt on this idea that we have a labour shortage," said Erin Weir, a labour economist with the United Steelworkers union.

"I think most of this idea of labour shortages is based on anecdotes from the business community. They might have a different definition of a labour shortage. Employers might believe that if they can't get the employees they want at the wages they are prepared to offer — that's a labour shortage."

Under attack in the House of Commons on Monday, Prime Minister Stephen Harper reiterated his pledge to reform the foreign worker program that, according to opposition critics, allowed Canadian firms to bring in 340,000 foreign workers last year.

The issue became front-page news last week after Royal Bank was forced to apologize for outsourcing 45 jobs to a U.S.-based firm that made use of the program.

NDP Leader Thomas Mulcair said the temporary foreign worker program had been allowed to degenerate into a source of cheap labour, allowing firms to replace "clerical workers in Ontario, fish plant workers in Newfoundland and Labrador, food service workers in Alberta and miners in British Columbia" with non-Canadians.

"There are still 1.4 million unemployed Canadians. Could the prime minister tell them what specific skills are required to work at a Tim Hortons counter that he thinks Canadian workers do not have?" he asked.

Shortages only in some sectors

Harper responded that "there are certain cases in Canada where there are absolute shortages of workers" and that he will make sure the program is reformed "so it cannot be misused in any such way."

TD Bank chief economist Craig Alexander said he hears employers complain about labour shortages everywhere he goes throughout Canada but agrees the macro-economic numbers don't bear it out.

A recent Bank of Canada survey of businesses found that the number of firms reporting labour shortages is below the historic average, and wage gains have been modest in Canada, with the exception of some trades in the oil patch in the West.

"The bottom line is we do have shortages, but it's in certain occupations and certain trades," said Alexander.

Still, Weir said the better response to specific and isolated cases of skills shortages is to let the market do its work, which would require employers to pay more — either in salaries or training — for a scarce commodity.

"There's always the possibility of a specific shortage of specific skills in a particular location, but of course the long-term solution is for more local residents to acquire the needed skills, or for workers with those skills to relocate to that area," he said.

"The temporary foreign workers program actually works against that by often allowing employers to fill vacancies without offering training or increasing wages."

The Statistics Canada report shows the number of job vacancies has fallen steadily since reaching a high of 270,000 in August.

For 2012 as a whole, however, there was an average of 250,000 job vacancies a month among Canadian businesses, compared with 235,000 in 2011.

For every job vacancy, there were 5.5 unemployed people in 2012, down from 6.0 in 2011.