The Canadian economy has lost nearly $13 billion over the past year due to a national labor and skills shortage in the manufacturing sector, according to a new report.
Canadian Manufacturers & Exporters (CME) annual labor survey of 563 manufacturers in 17 industries across the country found nearly two-thirds lost or refused contracts and experienced production delays due to a lack of workers.
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Penalties and lost sales resulting from these issues totaled $7.2 billion, according to the organization.
Additionally, 43% of companies postponed or canceled capital projects due to shortages, resulting in an additional $5.4 billion lost in investments, the CME said.
The pandemic has had lingering effects on the labor market in the industrial sector, according to the report – for two consecutive years, more than 80% of manufacturers said they faced labor and skills shortages, against 60% in 2020 and 39% in 2016.
The sector was struggling with labor issues before the pandemic, said CME President and CEO Dennis Darby, but the difficulties intensified during the pandemic and have not stopped.
“While the pandemic subsided from a societal perspective, concerns about labor shortages were still going strong,” he said.
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CME chief economist Alan Arcand said in the report that two factors are conspiring to create the shortage: an aging cohort of baby boomers retiring in waves and a lack of interest in manufacturing jobs at home. young Canadians.
During the pandemic, more workers have retired than usual, said Todd LeRoy, vice president of window company Loewen, while immigration has been curbed.
“Additionally, the past few months have seen a very strong labor market and simply not enough people to fill vacancies,” LeRoy said in an emailed statement.
“The birth rate just can’t keep up with the demand we have.”
One of the biggest hurdles reported by companies was the difficulty in finding workers with the right technical skills – shortages are hitting skilled production jobs the hardest, such as welders, machinists and industrial mechanics. Companies are also struggling to fill general labor or production positions, and supervisory or management positions.
Darby fears that shortages, especially of skilled labour, will become chronic and the problem cannot be solved overnight as it takes time to learn a trade.
“The pipeline of new entrants has been really, really slow during the pandemic,” Darby said.
He said the industry needs to hire more underrepresented groups, like women, people of color, Indigenous people and newcomers.
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To attract and retain workers, more than 70% of respondents said they are increasing wages and benefits. However, they also rely on help from the government, supporting automation, promoting trades and increasing immigration.
CME is also calling on the government to increase the Canada Job Grant and make it permanent, provide tax credits to offset employee training costs and equipment purchases, and accelerate the temporary foreign worker program.
Ongoing shortages have highlighted the need for greater automation, Darby said.
However, he said that while general labor and production work, especially repetitive tasks, is ripe for greater automation, it is much less likely to help close the gap in trades. specialized.
CME represents over 2,500 businesses across Canada, most of which are small and medium-sized businesses.
© 2022 The Canadian Press
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