Submitted by Linda Franklin, President and CEO of Colleges Ontario and Ian Howcroft, Vice President (Ontario division) of Canadian Manufacturers & Exporters. If Ontario is to have any serious hope of creating good job opportunities for young people, we must focus on the skills mismatch. The skills gap—the gulf between the skills and credentials held by many job-seekers and the qualifications sought by employers—is a serious obstacle for people who are unemployed or underemployed, particularly young people. Many of the good jobs that are available can’t be filled because the people seeking work don’t have the right education and skills.
The mismatch is also a serious problem for the province’s overall economy. As a new report from the Conference Board of Canada has confirmed, the skills mismatch is costing Ontario billions of dollars each year.
That report, called The Cost of Ontario’s Skills Gap, surveyed more than 1,500 employers and analyzed the true economic impact of the mismatch. It is one of the most comprehensive reports of this kind that has been done in Ontario.
The report’s findings are startling. The Conference Board says Ontario is losing as much as $24.3 billion in economic activity and $3.7 billion in provincial tax revenues each year because employers can’t find people with the right skills.
As the Conference Board noted, the tax revenue that is lost in Ontario each year is nearly twice the amount needed to fund the Big Move transit expansion in the Greater Toronto-Hamilton Area.
While Ontarians are among the most highly educated people in the OECD, the Conference Board says some Ontario students’ educations are misaligned with the labour market. And the report makes it clear the skills mismatch affects a wide range of sectors, from engineering, health care and the physical sciences to mining, manufacturing and accounting.
The skills gap is largely a result of innovations and technological advancements that are transforming the workplace. This is creating a growing demand for more highly skilled and better-educated employees.
It’s a problem in the current economy and will be a greater challenge in the years ahead as the workplace continues to be transformed.
In a groundbreaking report that was released a few years ago—People Without Jobs, Jobs Without People—former Seneca College president Rick Miner predicted the skills gap will be a problem even in an economic recovery. Miner said more than 700,000 people in Ontario will be unemployable by 2021 due to insufficient education and training.
That is 700,000 people above the traditional level of unemployment, which means more than one-million people will be unemployed. At the same time, more than one-million jobs will go unfilled in 2021 because employers can’t find suitable people.
Ontario and Canada need an aggressive strategy to close the skills gap. We must produce a more innovative workforce, in efficient and cost-effective ways.
We should follow the examples of countries such as Switzerland and Germany, which do a better job matching their educational programs with employers’ requirements. We should also do more to promote and value the career opportunities in the private sector, which is where most of the job growth will occur in the years ahead.
While Ontario has a high post-secondary completion rate, other jurisdictions are moving ahead of us. Ontario must take proactive steps to encourage more people to pursue higher education and training after high school, including apprenticeship training.
As well, greater numbers of post-secondary students need access to career-focused programs as part of their education. New measures are needed to help more students get a combination of both college and university. The province must also expand its range of degree programs, including allowing colleges to offer three-year degrees in career-focused programs. This will help students seeking degrees and career-specific skills to graduate more quickly and move into careers where people are needed.
Governments will have to play a leading role in the efforts to tackle the skills mismatch. A coordinated effort will be needed to ensure that businesses, governments and educators have clearly defined goals and are collaborating effectively to meet those targets.
The skills mismatch is a serious threat to our economy—today and over the longer term. It is essential that we close the gap. We all have a stake in ensuring that people who enter the workforce in this new economy are as successful as possible.