2020 Labour Market Issues: A Message from the President

Greetings and warm wishes for a happy new year. As we welcome 2020, we celebrate the many achievements that made 2019 a year of growth and success, and we look ahead to further strengthening our organization and the tourism sector as a whole.

Canada’s economy continues to undergo structural transformation brought upon by social, economic, and political dynamics, with significant labour market shifts that are changing the nature of work. Canada’s unemployment rate is at its lowest since 1976, averaging 5.7% from January to November 2019—below the 6% mark that is generally considered to be ‘full employment’. Over that same period, tourism’s unemployment rate consistently tracked lower than the economy overall, at 5.0%.

While the labour market gets increasingly tight, Canada’s tourism sector is thriving, bringing in record numbers of international visitors. This is a good news story, but growth is seriously hampered by the lack of workers. Companies grow by creating new jobs to fill demand. Demand also incentivizes entrepreneurs hoping to establish themselves in the market. The highly desirable economic growth can only happen if there are people available to fill job vacancies and newly created jobs.

Over the past year, Tourism HR Canada launched five new strategic priorities aimed at addressing two fundamental concerns: filling 10,000s of job vacancies and increasing the skills or capacity to ensure individuals and businesses can thrive. Our mandate—succinctly summarized as: “Building a Resilient and Inclusive Labour Market”—acknowledges the need to look beyond our traditional supply of workers and at the broader economic context.

Helping address the labour issues we face in tourism is part of a larger narrative about the labour market—in Canada and globally. Across the economy, long-term, systemic labour market challenges persist. A change in policy and increased investments in the right programs are needed if we want to address the chronic shortage of workers, improve on skills, tackle the lack of affordable housing, and improve on learner and worker mobility—all needed to achieve a more inclusive labour market and ultimately enable tourism employers to grow and prosper.

Much of this is about the investment in skills, which is a tricky and complex matter. There is a lack of coherence, duplication of resources, skills training not commensurate with market demand, and an overall lack of coordination or strategy.

Policies need to focus on increased participation of under-represented groups. Tourism HR Canada has had an absolute focus on attracting and preparing Indigenous populations, and on strategies to attract and integrate immigrant workers. Policies also need to focus on optimizing the existing workforce and increasing productivity, which is linked to both supply and skills. We need to address earnings inequality and look at boosting real wages. A focus must include improved job quality: work environment, work-life balance, job security, competitive wages. We also need to find ways to work more effectively with the informal employment economy (i.e., the gig economy) where the supply of casual workers will increasingly become important to tourism enterprises (but stability and success with this group will mean changes in public policy on social protections and employment security).

The year was marked with growth, strength, and measurable successes, with the commitment to address the chronic and persistent shortage of workers. Let me highlight just a few:

  • Tourism HR Canada expanded its reach and capacity to respond to ever increasing demands for tailored labour market information and analysis.
  • In collaboration with the Hotel Association of Canada, we launched the Destination Employment pilot initiative funded by Immigration, Refugees and Citizenship Canada, to attract and prepare newcomers to Canada for employment in hotel jobs.
  • Significant work advanced our multi-year Future Skills Framework initiative. Funded by Employment and Social Development Canada, this project is perhaps one of the most important legacy initiatives undertaken in the last decade. It is a direct response to the ever-increasing complexity of work and unique challenges we face in tourism—a sector that employs 10% of the labour market, in a multitude of job types, in every corner of Canada.

We are entering an era I call the ‘currency of competency’, where there is a critical need to better understand the underlying skills required of increasingly evolving and dynamic job roles—to help policy makers, employers, and education and training providers better prepare and support workers in navigating the changing world of work. Improved clarity in the definition and measurement of skills will help individuals navigate and thrive in the job market.

Let me itemize some of the salient trends, many of which were highlighted at our annual Labour Market Forum—an event that has become the most important platform to discuss tourism labour market policy issues.

  • Jobs/occupations/roles are all being redefined, and many new ones added.
  • The service sector is on the rise, with critical transferable skills in demand (both in and beyond the sector).
  • The United Nations, the Organisation for Economic Co-operation and Development (OECD), and others are describing service sector jobs as the principal driver of future employment growth.
  • There is an increasingly integrated world of work and learning—as part of a lifelong continuum.
  • There is a greater emphasis on acquiring life-long skills, re-skilling, upskilling, and the move to have a larger role for employers and workplaces to be classrooms.
  • The chronic shortage of workers we are facing is at all levels, types, and regions.
  • Unemployment is at its lowest in 40 years and this coincides with an increase in part-time employment (which contributes to weaker wage growth).
  • Significant variations in employment demands or outcomes exist between regions, including differences in seasonal employment needs.
  • Increasing demand and significant growth projects for tourism products and services are hampered by lack of workers and skills.
  • Increased globalization and variables such as technology progress, capital accumulation, and aging demographics are dramatically changing the work context.
  • Population aging will inevitably lead to an increase in the average age of those in the labour force, challenging workers’ ability to keep up with the pace of innovation and structural changes in the labour market.
  • Older workers (55-64) will represent a growing share of people employed or looking for a job.

And so, we have our work cut out for us. Even with the great progress over the past year, much more is needed.

The Future Skills project, Destination Employment, foundational labour market research, and other work have been possible because of increased investments by the Government of Canada on tourism labour market priorities. In the last budget, the word ‘skills’ was mentioned 137 times and there were many instances where tourism was identified as a priority, with several initiatives aimed at helping with retention, upskilling, attracting foreign talent, and improving outcomes with youth and under-represented groups. The emphasis on skills and labour issues was broader than I can recall in past budgets. We are hopeful these will be retained as part of the new government platform.

The 2019 budget also announced the set-up of the 7th economic strategy table dedicated to tourism, designed to help bolster and promote investments in skills and the labour market. Minister Joly initiated the ‘Federal Strategy on Jobs and the Visitor Economy’, which brought further attention to the need for increased investments in human capital for the sector.

That same budget announced continued investments in labour market development agreements, workforce development agreements, and a program called Skills Boost. The focus of these programs is on skills training, skills upgrading, and work experience. One notable new item this past year was the Future Skills Initiative. Announced in January, it is designed to ‘help Canadians prepare for the future of work’: explore trends, test innovative approaches. This is one we have looked at closely; for those familiar with the former sector council program, it shares some of the same objectives and comes with a larger budget.

In this past year, Tourism HR Canada was a benefactor of the Canadian Experience Fund aimed at “creating, improving or expanding tourism-related infrastructure or new tourism products and services”. Funded by Industry, Science and Economic Development Canada, this project enabled us to initiate important skills-building projects with both the Indigenous Tourism Association of Canada and Canadian Gay and Lesbian Chamber of Commerce.

I mention these examples from the last budget because they show a positive movement to investing in skills and highlight program areas we continue to look at as part of the overall strategy to address our labour needs. No single program will do it all, and more targeted programs are needed.

We are starting a new chapter with a new government which, invariably, will bring on more change. As Canada’s economy continues to undergo structural transformation with significant labour market shifts, we hope to see continued investments that serve the visitor economy. Our challenges also underscore the need for us to be even more vigilant and focused on labour market policy. We must strive for continued collaboration with all tourism labour market stakeholders, work towards improved coherence and efficacy of policy and programs, and seek sustained funding that enables Tourism HR Canada to work on behalf of the industry to tackle these important issues.

A thank you to all Board Members and the large number of stakeholders who have contributed to the great work over the past year.

Best wishes for a successful coming year,

Philip Signature

Philip Mondor
President and CEO, Tourism HR Canada