Is There a Skill Gap in Canada?

The increased employment of knowledge workers in the Canadian economy, combined with the growing number of employers reporting difficulties recruiting qualified employees, raises questions concerning the supply of skills in Canada. The goal of this paper is two fold. We will first identify the issues confronting us, and then seek to resolve them by examining the available empirical data. First, by drawing principally on an analysis of descriptive statistics, we conclude that there is no reason to believe that, globally, Canada is suffering from a broad-based shortage of skilled labour or that its workforce cannot fulfil the economy's needs. Second, examination of microeconomic data reveals an increased frequency of specific labour shortages in certain sectors and occupations in recent years. Nonetheless, it does not appear that these shortages are more common today than they were in the past at similar stages of the business cycle. We conclude that while there may be a growing labour shortage (skilled and low-skilled), there is no aggregate shortage of skilled labour. Third, available data indicate that Canada compares favourably with many of its principal competitors in world markets, both in terms of investments in human capital and in the stock of skills. Finally, we investigate the minimum skill level necessary for success on the Canadian labour market. We conclude that, at the very least, young people today need a high school diploma to qualify for even the lowest skill jobs.