While investor confidence, primarily signaled through foreign direct investment (FDI), continues to be a major concern for industries in Canada, according many economists believe the country’s economy is booming. 

The latest Statistics Canada Monthly Labour Force Survey showed that the country added 27,700 net new jobs in May, primarily in full-time employment. This pushed Canada’s unemployment rate to a new four-decade low of 5.4 percent, which hasn’t been reached since 1976. However, the same survey reported that employment in construction fell by 8,600, despite the fact that we are well into the construction season.

Though the unemployment rate is at a historical low, skilled labor shortages continue to plague Canada. A recent report by the Canadian Agricultural Human Resource Council found that Canada’s farm labor deficit is expected to double by 2029 to 123,000 workers. In 2017, labor shortages in the agriculture sector were found to have cost farmers $2.9 billion in lost revenues. With the deficit increasing, revenues lost are predicted to only increase.

The situation is no different in the construction industry. BuildForce Canada, which is contracted by the government to do labor market information assessments, found that the Canadian construction industry will have 300,000 job vacancies over the next decade. Recruitment rates over the same period show that there will be a shortage of 80,000 workers across the construction sector if trends continue. 

Shortages in both the construction and agricultural industries hamper their ability to efficiently grow, despite the demand for agricultural products and infrastructure projects.

For example, Ottawa is currently undergoing an infrastructure boom. Steve MacKinnon, Liberal Member of Parliament for Gatineau and Parliamentary Secretary to the Minister of Procurement, recently stated that the city was undergoing an unprecedented number of infrastructure projects. Steve Goodman, president of the National Capital Heavy Construction Association, whose members employ more than 9,000 people in the city, agrees with this assessment. His association and members, however, are sounding the alarm on the shortage of laborers and the industry’s ability to finish all the city building projects.

This micro-example shows why the $2.2 billion transfer to the Gas Tax Fund announced in Budget 2019 by the federal government wasn’t praised by the sector. While increased investments in infrastructure are always welcomed by the construction and equipment industries, sudden increases don’t allow them to properly plan. Furthermore, labor shortages already impacting an industry’s efficiency hampers its ability to adequately respond to increased funding of projects. These shortages are one of the primary reasons AED is continuously advocating, at all levels of government, looking at ways to increase the labor pool. From the recruitment of underrepresented groups to apprenticeship funding measures to targeted immigration, the correct suite of policies can help with this ongoing issue. Until labor shortages in Canada can be corrected, the equipment industry and its downstream customers’ ability to grow will continue to be limited. 

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