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The spotlight is now on skilled trades and with good reason. Looking at the trends, the demand for workers will be high and the supply will be constrained, meaning potential shortages in many occupations for years to come. And, unlike the situation in traditional white-collar positions, jobs in the trades aren’t likely to be replaced by artificial intelligence.
Workers can’t be trained overnight to fill needs, however, so the real question might be whether we will have enough skilled workers to meet the needs of a Canadian economy facing some major economic challenges.
A May report on Canada by the Organisation for Economic Cooperation and Development (OECD) outlined some of the economic issues at stake in Canada. At the top of the list is Canadian productivity, which is close to the OECD average but well below that of many advanced nations including the United States. Added to that, similar to other countries, Canada will have to deal the reality of a changing climate, which will mean a need for ‘green skills’. More specific for Canada is the need to build a substantial amount of new housing. For all of these challenges, the report sees having the right workers in place as being vital and that means having enough workers in the skilled trades.
At the moment, however, the skilled trades are under-represented in the Canadian workforce. According to a 2024 report from Statistics Canada, the country leads the G7 in having the most educated workforce as measured by college and university graduates, but the same cannot be said for those in the trades.
In fact, the number of working age apprenticeship certificate holders is falling. In 2021 (the last year for which data is available) there were 1.62 million tradespeople employed in Canada, a drop of 5.7 per cent from 2016. Although some of this was because of pandemic closures, the pandemic also caused record declines in those registering for training in the trades, which does not bode well for supply.
With baby boomers and Gen Xers rapidly exiting the workforce, the number of vacancies in the trades is rising, suggesting any current skill shortages will only be amplified over time. The OECD estimates that between retirements and new demand Canada will have about 1.2 million job openings in the trades over the next decade, which will account for about 15 per cent of all job openings.
The timing is right for young workers to take a good look at the trades. The May Labour Force Survey showed that the Canadian unemployment rate for youth aged 15 to 24 was 14.1 per cent, more than twice the 6.9 per cent rate for the overall labour force.
The weakness in the market suggests that many young workers should be open to the idea of acquiring training in the trades.
The OECD report lists that benefits of doing so include the fact that in Canada young adults with vocational secondary or post-secondary non-tertiary education out-earn their peers with a general education by about 25 per cent. An added bonus is that apprenticeships are typically paid, which means young workers can start their careers without student debt.
As for AI, for the moment, it doesn’t seem likely it will have a huge immediate effect on employment in the trades. To be sure there are many applications of AI that will change the nature of trades, from using AI software to diagnose plumbing problems to utilizing it for training. Completely replacing workers with robots or any kind of technology does not seem to be practical however and any impact would likely be more muted than for many other professions. If traditional white-collar jobs appear to be the ones most at risk of being replaced, skilled trades would be at the bottom of the list.
Policy is slowly shifting to deal with the need for workers in the skilled trades although it might not be shifting quickly enough. In one of his first policy acts after taking office, Prime Minster Mark Carney announced a plan to support apprenticeship training with the release accompanying the announcement to say that ‘The work of bricklayers, crane operators, welders and others are essential in building the future of Canada’.
The OECD report recommends that Canada go much further to increase the supply of workers, starting with eliminating the differences between provincial regulations that make it difficult for workers to move between provinces.
None of the concerns around the trades are actually new and we have known for decades that the demographics would mean a wave of retirements and the need for workers. Interestingly, that was supposed to happen for a wide range of occupations but technological shifts are changing that story in many cases. With the trades bucking that trend and with the economic need for skills so high, now would be the perfect time for the public and private sectors to do what it takes and entice the labour market to shift in the right direction.