CFIB calls on employers to improve labour quality, mobility

Among sectors, construction is struggling the most with recruitment, followed by social services and personal services.

Employers across the world are increasing their experience requirements for entry-level jobs as they lament the lack of experience of their recent hires, according to a previous Deloitte report. Meanwhile, Canada’s unemployment rate rose to 7.0% in May—the highest level since September 2016, excluding the pandemic years—according to the Labour Force Survey released by Statistics Canada (StatCan).

Mismatch between employer needs, available talent

CFIB’s latest analysis, 53% of SMEs say labour shortages are a major barrier to growth, while 44% report that a shortage of skilled workers is directly limiting their ability to expand sales or production.

"At the core of this challenge is a persistent mismatch between business needs and the available workforce," say Cruz and CFIB’s research analyst Alchad Alegbeh. 

A full 69% of SMEs identify a shortage of qualified candidates within their sectors as the primary obstacle to recruiting skilled employees. But the problem runs deeper: nearly 57% of small businesses report a disconnect between what candidates expect in terms of pay or benefits and what the business is offering, according to the report.

Alegbeh and Cruz added that "the greater challenge is now finding qualified candidates whose expectations and skill set align with the demands of the role."

"The issue of labour shortages has evolved — while many sectors still face a lack of applicants, the greater challenge is now finding qualified candidates whose expectations and skill set align with the demands of the role and the constraints faced by small businesses," they said. "These combined barriers — shortages, skills mismatches, compensation limits, and attraction difficulties — don’t just disrupt hiring; they directly limit business growth and constrain productivity."

CFIB’s recommendations to improve labour quality, mobility

Now, CFIB is calling on governments to enhance labour quality by doing the following:

• Introduce tax credits and grants for SMEs that invest in employee training and upskilling.
• Provide wage subsidies or Employment Insurance (EI) premium holidays for SMEs hiring and training new or inexperienced workers.
• Encourage partnerships between small businesses and educational institutions to create apprenticeship and internship programs that can help bridge the skills gap.

As for labour mobility, CFIB recommends governments:

• Mutually recognise one another's regulatory requirements.
• Allow licensed professionals to work within the scope of their existing training and experience while undergoing registration processes in a new province or territory.
• Work with professional colleges and associations to lower or waive interprovincial registration fees.
• Streamline the registration process by legislating a clear timeline for professional certification approvals. Should approval timelines not be respected, implement compensation for businesses such as waiving registration fees.

Recently, the federal government introduced legislation to eliminate barriers to labour mobility and internal trade. The legislation—titled One Canadian Economy: An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act—will provide a framework to recognise provincial and territorial licences and certifications for workers. According to the government, this means that a worker authorised in a provincial or territorial jurisdiction can more quickly and easily work in the same occupation under federal jurisdiction.