Labour crisis in N.B. doesn't have to be inevitable as workforce ages, economists say

A Moncton-based construction company is struggling to find workers —  so much so that it's hiring employees with no experience or prior training. 

"It's the worst I've seen in 28 years, actually," said Mario Allain, president of FundyPros Specialty Construction. "I probably could hire 15 [to] 20 per cent more people."

Allain said his company is facing exceptional difficulty finding workers to meet the rising demand for construction. FundyPros is trying to address the worker shortage by finding green recruits to the building trades. 

"We need to train new people for our future generations to come in because this is only going to get worse," said Allain. 

"We have an aging population and we need to reverse that trend." 

The job vacancy rate in construction rose from two per cent in March 2020 to 5.2 per cent in March 2021.

Allain said the shortage of workers is affecting the ability of construction companies to meet a growing demand for their services, especially for residential apartments.

The main challenge of New Brunswick will be to find workers for jobs that are being vacated, rather than what we used to have as a challenge ...  which was to find jobs for workers who were available to work.- Richard Saillant, economist

And they're not alone. Job vacancies across several industries have been trending upward year after year in New Brunswick.

In 2020, the number of unfilled jobs in the province rose by 33 per cent — the highest in the country — although there was a slight dip in the first quarter of this year. According to the Department of Post-Secondary Education, Training and Labour, 60,000 job vacancies are projected over the next five years.

The sectors expected to have the most openings are health care and social services, retail and wholesale trade, manufacturing, and construction. 

Economists interviewed by CBC News agree New Brunswick's aging population is the issue, and believe it requires a multi-pronged government response to avoid a labour crisis. 

Immigrants needed to replace retiring baby boomers, says economist 

Economist Richard Saillant says the baby boomer population, generally those born between the end of the Second World and 1964, has led to a shift in focus by government and the public's attention — from creating jobs to finding the people to fill a growing number of job vacancies. 

"The main challenge of New Brunswick will be to find workers for jobs that are being vacated, rather than what we used to have as a challenge in the past, which was to find jobs for workers who were available to work," said Saillant.

"So there's a big change in paradigm and it's fully associated with baby boomers going through the various stages of life."

Saillant said getting back to pre-pandemic immigration levels is critical to addressing the province's aging population. The number of immigrants entering the province dropped from 6,000 in 2019 to just 2,893 in 2020. 

Last year, Premier Blaine Higgs set a target to attract up to 10,000 immigrants a year by 2027. A  multicultural group in New Brunswick has warned, however, that this target is contingent on investment in support systems for newcomers.

Saillant said the province's ability to bring in more migrants depends on whether something is done to address the rapidly heating rental market. 

"To me there's a rationale for public intervention … and I would say our prosperity depends on it," he said. 

Allain also sees immigrants as key to filling gaps in the construction industry workforce. 

"I'm all for it, bring them in," he said.

Higher wages may not be enough

When a labour shortage occurs, wages normally rise to attract more workers —  and they have. Wages in New Brunswick grew by 4.7 per cent in 2020, but higher wages might not be enough of an incentive to attract workers in high demand to the province.  

Labour economist Ted McDonald of the University of New Brunswick said earnings aren't the only consideration when  people decide to relocate for work. 

Factors like location, health care, work opportunities for a spouse, and schooling choices for children are also taken into account. 

"When it comes to smaller communities, an increase in wage is only one of many factors that families consider when deciding to move," said McDonald. 

But while forecasts now might be gloomy, McDonald said labour demands in the future might be completely different.

"There may be changes, where some industries go into decline and new opportunities arise," he said. "So where we'll be in 10 years, to some extent, it could be affected by circumstances we don't know right now."

Investing in technology could alleviate labour shortages

Herb Emery, another economist at the University of New Brunswick, said New Brunswick isn't the first jurisdiction in Canada that's had to contend with workforce losing great numbers to retirement.

"There's a lot of places that have already faced this transition with an aging population, and they've all solved it the same way," Emery said. "They've used digitalisation, automation, they increased productivity in a big way, and they brought in immigration."

A report published by UNB on labour shortages in manufacturing, based on data from 1997 to 2018, found that wages in the manufacturing sector were rising in New Brunswick, despite decreased productivity. Workers were being paid more, but the value of their output was decreasing. 

In contrast, labour productivity has increased over the years in other parts of Canada, while wages have remained relatively stagnant. 

One of the recommendations made in the UNB report was for the government to create policies to create incentives for more investment in labour-saving technology. 

Emery said investing in productivity would help decrease the province's reliance on low-skilled labour and make way for higher-paying jobs. Taking this approach, though, would require a different "policy mindset" in government, he said.

"New Brunswick has a mindset that we're trying to find labour to make sure we don't have to do the same transition. We want to carry on as we have been."