Dan Benoit, Streetwise Blog

Think our current economic problems are bad?

They’re just the tip of the iceberg if Canada’s workforce doesn’t undergo some serious restructuring and fast, a Halifax-based think-tank said in a December study.

With the first wave of baby boomers entering retirement age and a lack of young people entering the skilled trades, Canada will be into a huge labour shortage in the next five years that could last for decades.

A study from the Atlantic Institute for Market Studies predicts labour shortages will cause a declining standard of living, a poor economy and high inflation if things don’t change.

Beginning sometime in the middle of the next decade for the first time in at least a hundred years, the number of people willing and available to work in Canada will be smaller than the number of jobs potentially available for them, Dalhousie University Professor Emeritus Dr. Jim McNiven stated in the report.

An across-the-board general labour shortage will become a fact of Canadian economic life “for as far ahead as demographers are able to forecast,” McNiven wrote.

How do we solve this coming crisis?

Since Canadian birthrates are way down from previous years, we’re going to have to boost immigration far beyond traditional levels, the study says. Labour productivity will need to be increased at a faster rate than the historical average by encouraging the growth of higher-paying industries, by improving business practices and increasing skill and education levels of the workforce.

“If nothing changes, in 2026, one job in every eight will go begging,” McNiven wrote.

The Atlantic Institute for Market Studies Executive Vice President Charles Cirtwill says McNiven’s paper is timely because it shows even a long-term recession will do little to delay the point in time when there will be too few workers to support Canada’s economy.

But that’s in the future. What about now?

The federal government has indicated Tuesday’s budget could contain $30 billion worth of fiscal stimulus earmarked for upgrading national infrastructure like roads, sewers railroad lines, bridges and other big-ticket items.