And in the latest survey of small and medium-sized businesses by the Canadian Federation of Independent Business, “Shortage of skilled labour” has moved ahead of “Insufficient customer demand” as the top business constraint facing their members.4 Looking ahead, Canada’s demographic trends will compound the scarcity of labour.5 We are getting older, living longer and having fewer children.
That means more workers retiring and fewer people to replace them. This will put upward pressure on wages and lead to adjustments to the composition and the nature of the labour force. For firms, attracting talent while retaining relevant expertise and institutional knowledge will be more challenging.