Labour shortage in manufacturing harming Canadian economy, finds CME survey

Canadian Manufacturers & Exporters’ (CME) annual labour survey results show that labour and skills shortages are harming the Canadian economy. CME explains that in the last year alone, these shortages have resulted in economic losses totalling nearly $13 billion. This figure is calculated from the responses of 563 manufacturers from across the country.

Over the past year, 62 percent of manufacturers have lost or turned down contracts and faced production delays due to a lack of workers. This has resulted in $7.2 billion in lost sales and penalties for late delivery. At the same time, 43 percent of companies have postponed or cancelled capital projects because of labour shortages, corresponding to $5.4 billion of lost investment.

“Our survey confirmed what we’ve been hearing from manufacturers on the ground for a long time. Labour and skills shortages are a chronic and persistent issue for manufacturers, and they continue to limit the growth prospects of the sector. If we don’t find the workers we need, Canada’s economy will suffer”, said Dennis Darby, president and CEO of CME.

Highlights from the survey are as follows:

• The ongoing challenge of labour and skills shortages continues to be exacerbated by the fallout from the pandemic. For the second consecutive year, more than 80 percent of manufacturers reported facing labour and skills shortages, up sharply from 60 percent in 2020 and 39 percent in 2016.
• Shortages are most acute in production-related jobs, and manufacturers continue to have trouble finding enough highly skilled workers to fill skilled trade occupations and other workers to fill general labour and assembly positions.
• Eight in ten manufacturers say labour shortages in related sectors, like transportation and logistics, are also negatively affecting their business.

• The survey identified the biggest negative impacts of labour shortages on the manufacturing sector: delivery delays, increased costs, and mental health impacts on current employees.
• 15 percent of manufacturers are considering moving some or all their production outside Canada due to a lack of workers.

• More than 70 percent of survey participants have responded to labour shortages by increasing wages and benefits.
• Manufacturers are calling on governments to provide more support to encourage automation, do more to promote skilled trades to secondary students, introduce and expand apprenticeship programs and incentives, and increase the intake of immigrants.

“Today, CME is calling on the government to take concrete actions now to fill the more than 85,000 vacant positions in Canada’s manufacturing sector within a year,” said Darby. “We’re asking for government action on four fronts: providing more support for automation, bringing in more economic class immigrants and enacting reforms that reduce backlogs and improve processing times, providing employer-led training benefits to help upskill and reskill the workforce, and renewing and increasing funding for programs that encourage persons from underrepresented groups to seek a career in manufacturing.”

CME stated in a release that it will continue its direct engagement with all levels of government on this critical issue, pushing for programs and policy reforms that enable the manufacturing industry to grow and thrive. CME will also continue to regularly survey its members and measure the impact of labour shortages on the industry.

The complete results of the survey are available here.