Amid wave of layoffs, Canadian labour force in need of employment insurance reform, better support for workers: C.D. Howe

After a year marked by reports of mass layoffs and sector contraction, Canada’s labour force is in need of a change, a brand new report says.

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C.D. Howe Institute, the Toronto-based think-tank, notes that the country is facing a greater number of displaced workers due to the recent commodity price shock and also the ongoing shift from lower-skilled to higher-skilled work.

Policy changes, as a result, are needed to make sure Canada’s labour pool can adapt to the rapidly changing environment.

“Among the challenges facing Canada’s economy in 2016, tackling vulnerabilities in labour markets is going to be necessary to the achievements Canadians,” said Craig Alexander, vice-president of monetary analysis at C.D. Howe Institute. “The nation’s labour markets are being transformed by structural forces of globalization, technical change and aging demographics, while being buffeted by cyclical factors such as the recurring boom-bust in commodity prices.”

Canada saw a wave of layoffs within the energy sector this past year following a crash in oil prices. The Canadian Association of Petroleum Producers said recently chances are the oil and gas sector lost 100,000 indirect and direct jobs last year.

Statistics Canada noted earlier this year that while the economy added 158,100 net new jobs last year, there is a clear sectoral shift, with natural resource jobs declining and manufacturing jobs increasing.

The wave of resource sector layoffs coincides having a longer-term trend that is seeing the labour market shift from lower- and medium-skilled jobs to higher-skilled jobs, says Alexander, who had been previously the main economist for Toronto-Dominion Bank. A variety of forces are influencing that shift, including globalization, technical change and aging demographics.

Alexander said policy change and much more worker support is needed to make certain Canada’s labour force can adjust to the alterations.

Among the recommendations he makes are reform to employment insurance.

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“Different rules for use of, and also the duration of, EI benefits are inappropriate,” he explained. “For example, the recent plunge in oil prices has resulted in rising unemployment in Alberta (traditionally a low unemployment region), with the result that most Albertans need 700 hours of labor to be eligible for a EI in sharp contrast to the 420 hours of work required for most Atlantic Canadians.”

He goes on to recommend that the regionally separate criteria should instead be replaced with a “uniform, countrywide” employment insurance program.



Alexander also takes aim at labour data, stating that although there is a lot of it available in Canada, there are difficulties with public awareness, costs and if the data are released in a manner that is simple to use by businesses and analysts.

“There is scope for the federal government to visualize greater responsibility with this file, strengthening the capacity of Statistics Canada’s and Employment and Social Development Canada to do more,” he explained.

He goes on to include that Canada also offers room for “upskilling” – training more workers in new skills and roles to adjust to the modern workforce. Efforts should be designed to target “pockets of vulnerability,” including older workers, immigrants, Aboriginals and First Nations people.

Canada also needs to focus on making sure students are pursuing more degrees in science, technology, engineering and math, said Alexander, noting that lots of high-paying jobs are now found in these fields.

“An intricate concern is whether youths have the skills that businesses are looking for. For example, it seems that too many students are pursuing degrees that experience low employment rates, and too few are pursuing degrees in programs with high employment rates,” said Alexander. “This really is partly driving the popularity in young university degree holders taking positions that they are considered ‘overqualified.’ “