'The findings reinforce the increasingly important role universities play in developing the talent that drives innovation'
One million – that’s the number of university graduates that Ontario would need by the year 2035 to fill labour shortages in the province, according to a report.
The projection, prepared by Stokes Economics for the Council of Ontario Universities, puts net demand at 1,004,864 graduates between 2026 and 2035, equivalent to about 100,488 a year.
It accounts for both new positions created by economic growth and the replacement of workers leaving the labour force through retirement or death.
STEM and health lead demand
Stokes maps the demand across eight occupational groupings. STEM occupations — natural and applied sciences and related work — account for the largest share at 212,980 openings, or 21.2% of the total, followed by business, finance and administration at 195,316 (19.4%) and education, law and social, community and public services at 163,377 (16.3%).
Health sciences are projected to require 148,999 graduates, which the report says is equivalent to 43.7% of the current health workforce — well above the 31% replacement average across all occupations. For HR teams in hospitals, long-term care and community health, that figure points to a structural shortage rather than a temporary one.
The report identifies STEM as the principal driver of future demand, linking it to artificial intelligence and other priority sectors:
“University graduates in these fields will be at the forefront of the AI revolution—developing new technologies, advancing scientific discovery, and ensuring artificial intelligence is deployed safely, ethically, and in ways that benefit society. Their expertise will also be critical to advancing innovation in life sciences, critical minerals, agri-food, advanced manufacturing, cybersecurity, and defence, helping Ontario build a more productive, competitive, and resilient economy for the future."
Canada has the most educated workforce among G7 countries, according to a previous report.
Why a degree matters to employers
The forecast also addresses why employers place a premium on university credentials — a question central to how HR teams screen and develop candidates.
"For employers, education serves as a signal that candidates possess not only the technical knowledge required for a position, but also the capacity to learn and adapt. This helps organizations improve hiring outcomes, reduce mismatches, and increase productivity."
Stokes adds that the payoff extends to workers. Over the past 35 years, it reports, Canadians aged 25 and older with a university degree recorded an average unemployment rate of 4.7%, compared with 6.9% for high school graduates and 6.2% economy-wide. That advantage, the report says, has helped push applications from Ontario high school students to provincial universities up 17% since 2020.
A majority of Canadians are either unsure (39%) of the true value of a diploma or degree, or are convinced it is not worth the investment (13%), according to a previous report.
Capacity and funding constraints
Stokes and the Council of Ontario Universities warn that the supply of graduates is shaped by policy, funding and enrolment caps, and that shortages will intensify in STEM and health care without expansion of capacity.
"These projections demonstrate why, as demand for highly educated talent continues to grow across sectors, ensuring students have access to a high-quality university education will be essential to supporting Ontario’s economic competitiveness and ability to meet the needs of emerging industries," said Steve Orsini, President and CEO of the Council of Ontario Universities, in a statement about the report.
"The findings reinforce the increasingly important role universities play in developing the talent that drives innovation, strengthens communities and supports economic growth. With demand for more than one million university-educated workers over the next decade, Ontario’s ability to remain competitive, attract investment and drive innovation will depend on a strong and sustainable university sector that can expand opportunities for students and deliver the highly skilled graduates the province’s economy will need.”
The Ontario government has committed $1.7 billion to create 70,000 additional postsecondary spaces — 30,000 announced earlier this year and 40,000 to be allocated this summer. The Council says aligning those spaces with the highest-demand occupations will be central to closing the gap.
Both organisations frame the graduate pipeline as a competitiveness issue, arguing that a failure to meet demand poses a structural risk to Ontario's long-term economic growth — and, by extension, to the employers that rely on that talent.
Highly educated immigrants in Canada are not achieving the same labour market success as their counterparts in the United States, according to a previous report from the Fraser Institute.
