Earlier this year, I wrote about the Fredericton chamber’s over-arching policy priority – creating a competitive business environment. Ten years ago when we talked about that idea, we primarily meant the tax and regulatory conditions. While those are still important – we’ve come to understand that a good environment for growth means much more than that – some of those key issues are contained within our other priorities and this month I want to drill down a little on what is probably the top issue for many employers – workforce development.
The province’s workforce is in itself a complex issue that requires short- and long-term solutions to our current deficit of available workers. It also requires an understanding of how we got to where we are today when for decades public policy was created based on too few jobs for too many workers. Today – that situation has been completely turned on its head and we are struggling to adjust, but as economist Richard Saillant says – better to be managing the problems of growth than the problems of decline.
The primary factor affecting the workforce has been the slow, seemingly inevitable demographic march that has been well-known in New Brunswick and throughout Atlantic Canada for many years. Until very recently, our population has been stagnant or in decline and getting older as younger workers left to find better economic opportunities elsewhere. We were able to partially mitigate the effects of outmigration through immigration, but struggled with retention as newcomers arrived and couldn’t realize the opportunities they were seeking in New Brunswick and moved onto other provinces (or never arrived at all). In fact, the three years before the arrival of the Syrian refugees saw the province’s population decline – but the trend has been reversed since that time and last year we broke the 800,000-population mark. At the 2023 State of the Province Address, Premier Higgs announced that New Brunswick’s average age had dropped by six months – a major achievement given where we were five years ago.
Many newcomers landing in New Brunswick are of working age, we’re getting younger and growing – so why has the workforce situation gotten so much worse over the past five years?
The most common response is often related to the pandemic and government support programs that are disincentivizing work. While those programs undoubtedly had an impact on the workforce when they were available, they are now long gone. The federal government is in the process of expanding Employment Insurance both in terms of length / amount of benefits, as well as making it easier to get in the first place. We expect those changes to exacerbate the workforce availability issue – which is the last thing businesses need in the face of nearing full employment. However, that EI reform hasn’t happened yet, and with pandemic-related benefits now over, many are in between eligibility periods – so government benefits aren’t the entire reason for the current dearth of available workers.
In fact, in January 2023, 375,000 Canadians received regular Employment Insurance (EI) benefits, down by 20,000 (-5.0%) from December 2022. This was the lowest number of regular EI beneficiaries on record since comparable data became available in 1997 (outside of the period when the Canadian Emergency Response Benefit was in place from March to September 2020). On a year-over-year basis, the number of regular EI beneficiaries fell by 294,000 (-43.9%). The largest proportional decline was observed among young women aged 15 to 24 years (-73.0%; -27,000), followed by young men aged 15 to 24 years (-59.9%; -31,000).
The Atlantic Provinces Economic Council provided a lot of clarity with a report released in March – Where have all the Workers Gone1? The short answer is nowhere – there are actually 40,000 more workers in Atlantic Canada than prior to the pandemic. Two main factors are identified – (1) labour demand having increased nearly twice as fast as this growth – trouble in the short-term and (2) we’re still losing the demographic battle with only seven young people joining the workforce for every ten retirements – trouble in the long-term. Ultimately if we can’t solve the workforce issue, we will not be able to maintain our recent positive momentum for growth.
The inevitable conclusion then is that we still need to focus on population growth and retaining more newcomers. Recently, New Brunswick received a 67% boost to our immigration numbers for 2023 – now up to 5,500 available spots under various streams. That’s great and we absolutely need it – but we can’t ignore that many parts of the province are already struggling with recent growth in foundational ways. It seems that all public policy roads lead back to housing and health care – if we can’t provide those basics to current and future residents (and right now we can’t) we’ll be back in decline in no time.
These are issues that really require all levels of government along with the private sector, non-profits and charities working collaboratively. That’s often easier said than done, but we seem to be past the first hurdle – all levels of government have accepted they have a role to play for both housing and health and are actively working on them. Importantly, they are also talking to each other, and the next phase will be to truly break down invisible silos and work as a team – the sum of each of these parts is a great step forward but cannot achieve the same results as everyone working together as a whole. I’m confident we’ll get there – crises tend to make imaginary barriers disappear and that’s how we should be approaching these files – we can’t solve the workforce issue otherwise.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with more than 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’.