With an economic ‘super cycle’ on the horizon, the proposed Saskatchewan Workforce Retention Program could help address the provincial labour shortage
Jobs are going unfilled in Saskatchewan and a solution is being proposed to help relieve the strain on employers, as major projects move ahead in the province and workplaces adapt through a pandemic.
Saskatchewan recorded a peak number of job vacancies in the second quarter of this year. Between April and June, Statistics Canada figures show there were 16,990 positions that went unfilled.
Some point to the federal government’s pandemic income support programs for individuals as causing the issue. These programs were meant to provide emergency income to Canadians impacted by COVID-19 and to, early on, address the jobs being lost to the pandemic. But there is a labour shortage around the world and it is coinciding with an elevated unemployment rate, suggesting there is more to the situation.
Pressure on Saskatchewan employers
While economists, human resource specialists and others try to figure out exactly what is occurring, employers in the province have work that needs to be done if they are to capitalize on opportunities.
“Saskatchewan seems to be heading into an economic super cycle with a lot of projects on the horizon,” said Andrew Williams, who conceived an employer support program he’d like to see the provincial government create. He is the chairman of the Saskatoon and Region Homebuilders Association and CEO of North Prairie Developments.
More than $10 billion in major projects have been announced for the province, including some of the largest investments ever made in Saskatchewan. BHP’s Jansen S1 potash project, the new canola crush facilities announced by Viterra, Ceres Global Ag and Cargill, as well as the expansion by Richardson, the Red Leaf Pulp wheat straw mill and nearly $1 billion in forestry development at Prince Albert are a few of the immediate projects that will demand a strong workforce.
While construction is one of the sectors in Saskatchewan that recorded the largest number of job vacancies in the second quarter of the year, other sectors have even more jobs to fill – accommodation and food services, retail trade and health care and social assistance. There are many jobs in these sectors that do not require workers with post-secondary training.
Williams would like to see the province offer a new income tax incentive – to be called the Saskatchewan Workforce Retention Program – that would encourage people to choose to live and work in Saskatchewan for a number of years.
Before explaining the details of what he is proposing, let’s take a look at what is happening in the Saskatchewan labour market.
“That’s really been the issue, that the marketplace had a lot of pent-up demand, so we need more workers.”
– Paul Martin
What is happening in Saskatchewan’s labour market?
Ahead of the pandemic, in October 2019, Saskatchewan’s unemployment rate was at 5.3 per cent with 32,100 looking for work. A year later, when the Canadian Economic Recovery Benefit (CERB) ended, unemployment was up year-over-year. The unemployment rate was at 6.7 per cent with 39,900 unemployed.
This year in October, as the Canada Recovery Benefit (CRB), the Canada Recovery Caregiving Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB) ended, the unemployment rate looked slightly better than a year ago. It was at 6.2 per cent with 37,200 seeking a job.
“Why do we have great shortages when we had low unemployment or pretty much full employment going into the pandemic?” asked Paul Martin, who has been working with Williams to promote the concept of the Saskatchewan Workforce Retention Program.
“Coming out the back end of the pandemic, all of a sudden there are great gaps, and so the great gap suggests to me this is about growing demand. That’s really been the issue, that the marketplace had a lot of pent-up demand, so we need more workers.”
Where are the workers?
The number of jobs going unfilled in Saskatchewan is higher this year than in 2019. What about the number of workers in the province? How has that changed since 2019?
The number of working-age people in Saskatchewan went down in that time. Statistics Canada population estimates show 4,772 fewer in 2021 compared to 2019. (That age demographic peaked in 2019 after 20 years of growth in Saskatchewan.)
So where are those people? Some moved to other provinces. Since 2013/14, Saskatchewan has been losing more people of all ages than it gains, as they move to other provinces.
However, the flow of people in and out of the province was altered during the pandemic as travel became complicated. Net interprovincial migration was down in 2020/21 with Saskatchewan losing 9,410 compared to 11,412 in 2019/20, according to Statistics Canada.
Fewer immigrants made their way to Saskatchewan during the pandemic compared to the year before it began. There were 7,321 immigrants in 2020/21 compared to 13,369 in 2019/20, which is down from the 2015/16 peak seen over the last 20 years.
The labour force is made up of those working and those looking for work in the province. Saskatchewan’s estimated labour force contracted by about 6,800 people between October 2019 and the same month in 2021, according to Statistics Canada. Meanwhile, the agency’s figures show 5,100 more people were looking for work in October 2021 than in October 2019.
The number of people working in the province has not reached the levels seen in 2019. There were 14,500 fewer people holding a job in Saskatchewan in October 2021 compared to two years earlier. The number of payroll employees was down compared to two years ago. In the second quarter of 2021, there were 13,720 fewer compared to the same quarter two years earlier.
Those whose work requires professional designations and takes place in an office setting are also seeing a labour shortage, but it is less severe.
“At this point, the conversation is really being directed towards industry associations that have a lot of employees doing general labour,” said Martin. “That’s anyone in the building realm, from general construction through to road and infrastructure building, to those in the hospitality sector as well as in trucking.
He continued: “One of the great mysteries is where did all those people go? What are they doing? This is all symptomatic of what is being called the great resignation. People are rethinking their whole career plan.”
The proposed Saskatchewan Workforce Retention Program would benefit new workers entering the workforce or seasoned workers re-entering it.
Pandemic income support programs
Some question if people are getting by on the pandemic income support programs rather than taking a job.
Federal government figures show how many applied to those programs, but those numbers do not show how long or how many times those applicants relied on those programs.
The first such program was CERB. The prime minister announced it just days after the World Health Organization declared the pandemic in mid-March 2020. It provided income to those who were out of work, had their work hours reduced or had to care for someone because of COVID-19.
CERB ended in early October 2020. In that time, Saskatchewan had 241,650 total unique applicants for the program.
When the federal government announced a package of programs to replace CERB in October 2020, it said the Canadian economy had recovered 100 per cent of the jobs lost to the pandemic.
That package included the Canada Recovery Benefit (CRB) as well as the Canada Recovery Caregiving Benefit (CRCB) and the Canada Recovery Sickness Benefit (CRSB). More people qualified for those than CERB, such as those who are self-employed and gig workers.
Those programs ended in late October 2021. In the year that they existed, Saskatchewan had 56,330 total unique applicants for CRB. To qualify for CRB, you had to be looking for work and not refuse reasonable work.
What employers need now
“Programs that support those facing barriers to employment so they can be overcome are important,” said Williams, “but it takes time for the benefits to be realized by employers. People need to be trained and gain experience, which can take years.”
The need for a quick fix led Williams to think about how skilled and experienced people could be encouraged to live and work in Saskatchewan and stay there longer. For example, in the building industry, he saw employees reaching retirement age and leaving the workforce.
“I wondered if they could be incentivized to stay for a few more years if given a tax break,” said Williams. Gaining a few more years of their labour could help bridge the gap.
Retaining and attracting skilled and experienced people is also important to at least narrow the gap. In the past, Williams had witnessed people leaving the province for careers elsewhere in Canada, and he was keenly aware of the Graduate Retention Program (GRP). Launched in 2008, it provides tax rebates of up to $20,000 to post-secondary graduates who live and file an income tax return in Saskatchewan.
Williams thought there would be a benefit to expanding that type of program to include more than post-secondary graduates. The proposed Saskatchewan Workforce Retention Program would benefit new workers entering the workforce or seasoned workers re-entering it. Those workers could be in Saskatchewan now or move here.
To be eligible, the new workers would need to commit to working and remaining in Saskatchewan for five years. In year four and five of living here, they would qualify for a $10,000 tax break for each of those years.
Bringing this proposal to the province
Williams brought the idea to the Saskatoon and Region Homebuilders Association to get it rolling. Now, it is time to see what others think. Industry associations are being approached with this concept to begin creating a coalition with a common voice.
“Government is going to have to decide whether it can salute this, but industry has said: ‘We have a problem. We don‘t have to reinvent the wheel to deal with it. Let‘s just expand the wheel. We think extending the Graduate Retention Program, which has proven to be productive and effective, is one of the solutions to the labour shortage – or at least part of the solution,’” he said.
The provincial government is being encouraged to recognize how the province as a whole can benefit from this idea.
“The more horsepower we have in the province, the more activity we generate, so this will create more investment in Saskatchewan. People will want to build more, so there is a benefit to government,” said Martin.
“The government will make more revenue if we get more people working for a longer period of time. They pay more taxes – sales tax and income tax – so the province is a recipient of that.
“It‘s revenue today for the government, who will pay out later.”
To work, a program like this requires commitment from employers as well as employees and government. Jobs that offer years of employment need to be created.
Saskatchewan will need to move quickly to address this labour shortage. This province is not the only jurisdiction in the world facing a shortage of workers and the province is already dealing with more people leaving than arriving. Expanding an existing program to quickly address the labour problem makes sense, believes Martin, at a time when so much about labour has become uncertain.