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Canadian Labour Market Outlook: Demand, Supply, and Imbalances

This report provides a 10-year outlook for the Canadian labour market, focusing on key conclusions from labour demand and supply analysis. It explores the potential imbalances between job demand and worker supply, including retirements, immigration, and mismatches between field of study and occupation.

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Canadian Labour Market Outlook: Demand, Supply, and Imbalances

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  1. A 10-year Outlook for the Canadian Labour Market(Canadian Occupational Projection System 2009 Reference Projection)The Labour Force of the Future and Imbalances between Job Demand and Worker Supply Policy Research Directorate, Strategic Policy and Research Branch

  2. Overview • Presentation on Labour Demand: Key Conclusions • Labour Supply • Labour Force • School Leavers • Immigration • Imbalances • by Broad Skill Level • by Occupation • Mismatch between Field of Study and Occupation

  3. Presentation on Labour Demand:

  4. Retirements will account for most of the job openings Job Openings from Expansion Demand and Replacement Demand, 1996-2018 Source: Policy Research Directorate, HRSDC (Reference Scenario 2009). * Other Replacement Demand Includes Deaths and Emigration

  5. Two-thirds of all job openings will be in occupations usually requiring PSE or in management occupations Job Openings from Expansion Demand and Replacement Demand by Skill Level, (2009-2018) Thousands Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  6. Labour Supply

  7. Labour force growth is projected to slow over the next decade Growth of Labour Force 15+ (Non-Student), 1999-2018 (%) Thousands Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  8. Labour force growth is projected to slow over the next decade Growth of Labour Force 15+ (Non-Student), 1999-2017 (%) Thousands Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2008).

  9. 10-Year Outlook for the Canadian Labour Market Population growth will be somewhat slower Population 15+ (Non-student): Annual Growth Rate, 1999-2018 Forecast Average growth rate over 2009-2018: 1.17% Average growth rate over 1999-2008: 1.40% Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  10. Labour force participation rates by age group are projected to increase further Labour Force Participation Rates for Age Groups 25-54 and 55-64, 1990-2018 (%) Forecast 25-54 55-64 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  11. 10-Year Outlook for the Canadian Labour Market Nevertheless, rapid increases in the share of 55+ population will pull down the aggregate participation rate Share of Age Group 55+ in Total Population (Non-Student), 1990-2018 Forecast Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  12. 10-Year Outlook for the Canadian Labour Market Due to population aging, the aggregate labour force participation rate will start to decline in the next few years Labour Force Participation Rate, Total and by Gender (15+, Non-Student), 1976-2018 (%) Forecast Males Total Females Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  13. Projection Models - Structure Demographic and Macroeconomic Projections Employment Labour Force intra-flows outflows inflows Expansion Demand Replacement Demand: - Retirements - Emigrants - Deaths Job Seekers: - School leavers - Immigrants - Net reentrants Net Mobility Labour Supply Labour Demand Future Labour Market Imbalances by Broad Skill Level Change in employment versus change in labour force by broad skill level Future Labour Market Imbalances by Occupation Labour demand versus labour supply by occupation

  14. Youth population (15-29) will increase in the next decade, thus more youth are expected to enter the labour market Population 15-29 in ‘000s and as a Share of Total Population: 1971-2018 1999-2008 2009-2018 Average youth population: 6.49M Average youth population: 6.77M Population 15-29 (right axis) Share of population 15-29 (left axis) Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  15. Projection PhD (Right Axis) Ba. and First professional (Left Axis) College (left Axis) Master’s (Left Axis) Most youth entering the labour market will come from PSE programs as the enrolment rate will trend up Enrolment Rates in University Programs as a Percentage of Source Population, 1991-2018 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  16. The recession is expected to have a positive impact on enrolments in PSE programs First-Year Enrolments in Postsecondary Education: Impact of Recession Colleges: Recession Projection Recession Colleges: No Recession University: Recession University: No Recession Double cohort Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  17. Students who enrolled during the recession will enter the labour market during the economic recovery School Leavers from Postsecondary Education: Impact of Recession College_Recession Projection Recession College_No Recession University_Recession University_No Recession Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  18. The number of school leavers with less than high school is projected to decline by a third over the next 10 years School Leavers with Less than High School Education, 1990-2018 Projection Population 14-18 Population 14-18, ‘000s Reference 2009 Double cohort Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  19. Projection The high school dropout rate is also projected to resume a downward trend High School Dropouts, 1975-2018 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009)

  20. The number of school leavers with a high school degree is projected to increase marginally over the next ten years School Leavers with a High School Degree Only, 1990-2018 Projection Population 18-24 Population 18-24, ‘000s Reference 2009 Double cohort Double cohort Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  21. The number of school leavers with a college degree is projected to increase by 15% over the next ten years School Leavers with a College Degree, 1990-2018 Projection Population 18-24 Population 18-24, ‘000s Reference 2009 Double cohort Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  22. The number of school leavers with a university degree is projected to increase by 15% over the next ten years School Leavers with a University Degree, 1990-2018 Projection Population 20-29 Population 20-29, ‘000s Reference 2009 Double cohort Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  23. The share of school leavers with a postsecondary education will increase over the next ten years School Leavers by Education Level, 1999-2008 and 2009-2018 69.4% 66.7% 31.6% 33.3% 2009-2018 1999-2008 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  24. The younger cohorts entering the labour market are more educated than the older ones but the gap is narrowing Share of the Labour Force (Non-Student) with Postsecondary Education by Age Group, 1990-2018 Projection Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  25. 10-Year Outlook for the Canadian Labour Market As a result, the level of educational attainment of Canada’s labour force will continue to rise, but at a slower pace Share of Labour Force (25+, Non-Student) with a Postsecondary Education, 1990-2018 Projection Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  26. 10-Year Outlook for the Canadian Labour Market Immigration will play a smaller role than school leavers as a source of new job seekers Sources of New Job Seekers: School Leavers and Immigration (15+, Non-Student) 1997-2018 Projection Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  27. An increasing share of new immigrants in the labour force have postsecondary education Recent Immigrants (last 5 years) by Education Level, 2001 and 2006 73.7% 65.3% 34.7% 26.3% 2006 2001 Sources: Statistics Canada, Census 2001 and 2006.

  28. The match between the level of education and the skill level usually required by employers is not perfect Proportion of the Labour Force with a Given Level of Education by Skill Level, Amongst Population 25-29, 2008 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  29. Over six in ten job seekers will offer their services in high-skill occupations over the next ten years Job Seekers by Skill Level, 2009-2018 30.0% 29.7% 21.5% 7.9% 10.9% Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  30. Imbalances

  31. There is limited evidence of imbalances between demand and supply by broad skill level in recent decades Relative Unemployment Rates (left chart) and Relative Wages (right chart) by Skill Level Sources: Statistics Canada, Labour Force Survey

  32. 10-Year Outlook for the Canadian Labour Market Small gaps between demand and supply by skill level over the medium term but recession leads to excess supply conditions in the short run Job Openings and Job Seekers by Skill Level, as a Percentage of 2008 Employment, Outlook for the Next Two Years (2009-2010) and Ten Years (2009-2018) Projection Periods Job Openings in Excess of Job Seekers Job Openings in Excess of Job Seekers 2009-2010 2009-2018 Occupations Usually Requiring University Management Management Occupations Usually Requiring College or Apprenticeship Occupations Usually Requiring High School Occupations Usually Requiring On-the-Job Training Occupations Usually Requiring College or Apprenticeship Source: Policy Research Directorate, HRSDC (Reference Scenario 2009). Job Seekers in Excess of Job Openings

  33. 10-Year Outlook for the Canadian Labour Market However, in the medium term, several occupations will be facing shortage or surplus conditions Job Seekers and Job Openings by Occupation (3-digit), as % of 2008 Employment, Ex-Post Scenario Excess demand In balance Excess supply Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  34. An increasing share of the labour force with PSE will fill very low-skilled jobs Proportion of the Labour Force by Level of Education in Occupations Requiring On-the-Job Training, 1998, 2008 and 2018 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  35. More supply in high-skilled occupations when school leavers look for jobs related to their fields of study Job Seekers by Skill Level, 2009-2018 Sources: Statistics Canada and Policy Research Directorate, HRSDC (Reference Scenario 2009).

  36. 10-Year Outlook for the Canadian Labour Market In general, imbalances become more pronounced when school leavers look for jobs in occupations more related to their fields of study Job Seekers and Job Openings by Occupation (3-digit), as % of 2008 Employment, Ex-Ante Scenario Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  37. The case of nurse supervisors and registered nurses Job Openings and Job Seekers over 2009-2018 Under Two Scenarios for School Leavers – Nurse Supervisors and Registered Nurses Others Emigration Deaths Mobility Others Immigration Retirements Mobility School leavers Immigration Expansion Demand School leavers Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  38. The case of life science professionals Job Openings and Job Seekers over 2009-2018 Under Two Scenarios for School Leavers – Life Science Professionals Excess Supply Ex post: -900 Ex ante: -9,400 Others Immigration Others Emigration Deaths School leavers Immigration Retirements School leavers Expansion demand Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  39. Differences/Gaps Between Actual and Potential Supply, 2009-18 green: Similar actual and potential supply yellow: Small potential supply red: Large potential supply Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  40. Projected shortage conditions over the next 10 years are found mostly in high-skilled occupations Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  41. In those occupations that will be facing shortage conditions, increasing supply to meet demand pose significant challenges Excess Job Openings Versus New Labour Market Entrants from the School System and Immigration for Selected Non-Management Occupations, 2009-2018 Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  42. Projected surplus conditions over the next 10 years are found mostly in low-skilled occupations Source: Policy Research Directorate, HRSDC (Reference Scenario 2009).

  43. 10-Year Outlook for the Canadian Labour Market Key messages: Over the next ten years… • Labour force growth will slow mostly due to population ageing; • The main source of supply will remain the school leavers who will be positively impacted by: • The increase in youth population; • Enrolment rates on the rise. • New immigrants will only represent a small share of job seekers. • Only small imbalances will occur by broad skill level. • However, several occupations, will face excess demand (mostly high-skilled) or excess supply (mostly low-skilled); • A better match between supply and demand could be achieved by: • Better labour market information • Better skills recognition for immigrants • A more responsive postsecondary system

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