Global And U.S. Context - The Province of British Columbia

Report
Overview of British Columbia’s
Economy and Labour Market:
Challenges and Opportunities
Dr. Michael Bloom
Vice-President, Organizational Effectiveness and Learning
The Conference Board of Canada
B.C. Labour Market Forum 2010,
Vancouver, B.C.; November 25, 2010
www.conferenceboard.ca
Global and U.S. Context
• Weak recovery from recession is yielding
modest GDP growth.
• Developing economies are leading growth
and creating new markets—and new
competition.
• U.S. recovery continues to be dampened
by housing issues and relatively weak
consumer confidence.
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2
World Real GDP Growth
(annual per cent change)
Source: Consensus Economics.
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3
Uneven Growth in Global Economy
(per cent change, real GDP)
8.0
2009
2010
2011
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
E.U.
E. Europe
North
America
Asia Pacific
Latin
America
Source: Consensus Economics.
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U.S. Outlook
• U.S. recovery is a year old—but pace of
growth is slowing.
• European debt crisis is prompting some
firms to delay expansion.
• Consumer and business investment
spending on the mend but stronger job
creation is needed.
• Removal of fiscal and monetary
stimulus needs to be done carefully.
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10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
U.S. Unemployment Rate
(per cent)
'05
'06
'07
'08
'09
'10
'11
12
13
Sources: The Conference Board of Canada; Statistics Canada.
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Canadian Outlook
• Canada’s recovery is built on the
strength of the domestic economy—it
needs a revival in U.S. employment to
maintain momentum in 2011.
• Core inflation, higher energy prices,
rising sales taxes: have prompted the
Bank of Canada to start lifting rates.
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Canadian Outlook
• Higher rates and a fading European debt
crises will keep the Loonie strong.
• Real GDP growth of 3.0 per cent in
2010—easing to 2.5 per cent in 2011, as
government spending cools.
• Provinces will struggle with fiscal
situation—for most, balancing budgets
within five years will be difficult or
impossible.
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Employment Growth
Canada, 2001–12
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
272,000 job losses
01
02
03
04
05
06
07
08
09
10
11
12
Sources: The Conference Board of Canada; Statistics Canada.
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Canada Unemployment Rate vs.
Natural Rate (per cent), 1981-2015
13.0
12.0
11.0
Unemployment Rate
10.0
9.0
8.0
7.0
6.0
Natural rate
5.0
Sources: The Conference Board of Canada; Statistics Canada.
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Can. Employment (000s) 2001-2015
2,400
2,300
2,200
Professional & Other
Services
2,100
2,000
1,900
1,800
1,700
1,600
Manufacturing
Sources: The Conference Board of Canada; Statistics Canada.
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Can. Housing Starts vs. Household
Formation, 1997-2012 (000s)
Household formation
240
220
200
180
160
140
120
Sources: The Conference Board of Canada; Canada Mortgage and Housing Corporation.
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B.C.’s Transformation
• A past dependence on primary industries
created a powerful image of B.C. that still
survives in some quarters.
• But the largest provincial industries are
no longer forestry, mining, fishing and
agriculture.
• Reality: B.C.’s economy is transformed:
services, construction and manufacturing
are now dominant.
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British Columbia, 2011-12
CBoC Outlook Highlights
• A post-Olympic slump will hurt the
service sector in 2011, as several industries
find themselves missing the one-time
boost provided by B.C.’s hosting of the
2010 Winter Olympics.
• Real GDP growth will moderate in B.C. in
2011 as public infrastructure stimulus
spending comes to an end.
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B.C. Outlook – Autumn 2010
• The recovery will continue in the forestry,
manufacturing and mining sectors, and
new production from shale gas will
support near-term GDP growth.
• Forestry exports to China up 50 per cent;
double-digit increases Japan; solid wood
exports double to E.U. in 2010.
• Mining is shining—metal mining output
to double by 2013.
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B.C. Outlook – Autumn 2010
• Housing up in 2009, lost steam in 2010.
• Housing starts will slow in 2011 (CBoC
forecast).
• Employment has recovered to prerecession levels but more part-time
recovery than full-time.
• Unemployment will fall to 6.8 per cent by
2013 (B.C. forecast).
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B.C. Real GDP Growth
(percentage change, 2002 $)
6
5
4
3
2
1
0
03
04
05
06
07
08
09
10f
11f
12f
13f
-1
-2
-3
Source: B.C. Ministry of Finance.
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Real GDP by Province, 2010
(percentage change; 2002 $)
Sources: The Conference Board of Canada; Statistics Canada.
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Real GDP by Province, 2011
(percentage change; 2002 $)
Sources: The Conference Board of Canada; Statistics Canada.
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19
Long-term GDP Growth Rankings
(annual average growth, 2009-30)
Sources: The Conference Board of Canada; Statistics Canada.
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B.C. Real GDP Growth
(average annual growth)
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2001-2005 2006-2010 2011-2015 2016-2020 2021-2025 2026-2030
Sources: The Conference Board of Canada; Statistics Canada
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Total Employment Growth by
Province (percentage, 2005-30)
60
50
40
30
20
10
0
-10
-20
Sources: The Conference Board of Canada, Statistics Canada.
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B.C. Natural Resources vs. Other Goods
(% of employment)
6.0
5.5
5.0
Other Goods,
right axis
4.0
17.0
3.5
2.5
2.0
18.0
17.5
4.5
3.0
18.5
Natural Resources,
left axis
16.5
16.0
15.5
Sources: Statistics Canada; B.C Stats.
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B.C. Construction and
Manufacturing Employment (000’s)
250
Construction
200
150
100
Manufacturing
50
0
Sources: Statistics Canada; B.C Stats.
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B.C. Goods Sector
(Goods sector as a % of total economy)
27
26
GDP
25
24
23
22
21
Employment
20
19
18
Sources: Statistics Canada; B.C Stats.
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B.C. Service Sector – Boosts GDP
(GDP Index 1990 = 100)
200
180
Services
160
All industries
140
120
100
80
Goods
60
Sources: Statistics Canada; B.C Stats.
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B.C. Long-Term Outlook 2010-30
Highlights
• Aging population will drive changes in the
economy.
• Supply constraints on labour are not far
down the road.
• Net international immigration will need to
expand steadily over the forecast.
• Potential output weakens through 2030.
• Productivity gains would help sustain GDP.
Source: The Conference Board of Canada.
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B.C. Potential Output Growth
(contribution to growth, percentage points)
Sources: The Conference Board of Canada; Statistics Canada.
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Average Weekly Wages
(level $)
$2,500
$2,000
Canada
$1,500
$1,000
British
Columbia
Ontario
Alberta
$500
$0
Sources: The Conference Board of Canada, Statistics Canada.
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Real Output, Key Industries (ave.
annual compound growth, per cent)
Sources: The Conference Board of Canada, Statistics Canada.
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B.C.’s People
• Today, 4.5 million people live in B.C.—
13 per cent of the national population.
• B.C. produces 12.5 per cent of GDP.
• Vancouver is third largest metropolitan
area in Canada (after Toronto &
Montreal).
• Female population has grown faster than
males since 1980—women outnumber
men in urban regions—but not in rural
areas.
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B.C.’s People
• Population is aging – 36 per cent of
individuals are under 30 years of age,
while 27 per cent are over 55 years.
• Immigration, especially from Asia, has
been a major source of population
growth.
• As a result, B.C. is becoming more
culturally and ethnically diverse.
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B.C.’s Aging Population
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B.C. Workforce in Goods Sector,
2009
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Construction
Manufacturing
Agriculture
Mining, oil & gas
Forestry
Utilities
Fishing
Sources: Statistics Canada; B.C. Stats.
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B.C. Workforce in Service Sector,
2009
0.0
2.0
4.0
6.0
8.0 10.0 12.0 14.0 16.0 18.0
Wholesale & Retail Trade
Health care
Accommodation & food
Professional, scientific & technical services
Education
fFnance, insurance, real estate & leasing
Transportation & warehousing
Information, culture & recreation
Public administration
Business, building & support services
Other services
Sources: Statistics Canada; B.C Stats.
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B.C. Fastest Growing Industries
(change in employment, 1990-2009)
0.0
50.0 100.0 150.0 200.0 250.0 300.0 350.0
Building services
Other schools & educational support
Warehousing & storage
Security services
Management of enterprises
Management, scientific & technical services
Waste management & remediation
Motion picture & sound recording
Computer system design
Business services
Sources: Statistics Canada; B.C. Stats.
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B.C. Fastest Growing Occupation
Groups 2009-2019
• Health occupations (2.6 per cent annually)
• Trades, Transport and Equipment
Operators and Related Occupations (2.3
per cent annually)
• Natural and Applied Sciences and Related
Occupations (2.1 per cent annually)
Source: B.C. Labour Market Outlook 2009-2019.
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B.C. Regions, 2009-2019
Employment Demand/Labour Growth
Source: B.C. Labour Market Outlook 2009-2019.
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B.C. Labour Demand, 2009-19
Source: B.C. Labour Market Outlook 2009-2019.
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B.C. Projected Job Openings, 2009-19
Source: B.C. Labour Market Outlook 2009-2019.
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B.C. Change in Labour Supply
and Demand (2009-19)
45,000
40,000
38,210
Demand
35,000
30,610
Supply
29,640
Supply
30,000
25,000
36,660
Demand
22,400
23,430
Supply
21,640
16,690
15,370
20,000
33,810
Demand
19,380
9,640
New Entrants (Supply)
Replacement Demand
15,000
10,000
Net in-migration (Supply)
Expansion Demand
15,810
5,000
15,020
14,270
13,920
14,430
13,790
0
O666 Cleaners
O741 Motor vehicle and transit drivers O141 Clerical occupations, general office skills
Occupations with greatest numbers of job openings are:
Cleaners; Motor Vehicle and Transit Drivers and Clerical
Occupations.
Source: B.C. Labour Market Scenario Model 2009-2019.
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B.C. Top Demand Growth
Trades-related Occupations
23,660
25,000
Demand
16,420
16,770
Supply
Demand
20,000
13,790
9,850
10,290
Demand
11,550
Supply
Supply
15,000
Net in-migration (Supply)
7,920
10,000
8,120
New Entrants (Supply)
1,520
Replacement Demand
7,600
6,650
Expansion Demand
13,370
5,000
8,500
0
O727 Carpenters and cabinetmakers
8,650 8,330
6,190
4,900
O624 Chefs and cooks
O724 Electrical trades and telecommunication
occupations
Highest demand growth: Carpenters and Cabinetmakers;
Chefs and Cooks; Electrical Trades and Telecom
Source: B.C. Labour Market Scenario Model 2009-2019.
Occupations.
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B.C. Change in Labour Supply
and Demand (2009-19)
20,000
18,000
16,000
14,000
17,670
Demand 15,360
Supply
6,780
6,270
12,000
4,000
2,000
0
10,890
Replacement Demand
Expansion Demand
7,460
8,000
New Entrants (Supply)
12,500
Supply
9,080
10,000
6,000
Net in-migration (Supply)
15,280
Demand
8,360
Demand 7,000
Supply
3,450
4,250
9,010
6,280
5,040
4,910
2,750
O761 Trades helpers and labourers O729 Other construction trades O761 Trades helpers and labourers
Additional supply for “top growth” occupations will not
meet the increase in demand over the next ten years.
Source: B.C. Labour Market Scenario Model 2009-2019.
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B.C. Labour Market Outlook
Key Challenges
• B.C. will need to increase the size of its
workforce, and ensure it has the right skills
to support economic development.
• Ambitious gains in participation rates and
attracting more skilled immigrants are
vital—but more is needed to meet demand.
• Improving human capital to raise
productivity is imperative.
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Employer Succession Challenge
• Retirement of baby boomers will create
business owner shortages that threaten the
very existence of SMEs—so integral to the
survival of rural B.C.
• Today, 7 of 10 small business are owned by
baby boomers; more than half are age 55+
and hope to retire within 5 years.
• Next 3 decades will see a staggering
number of small businesses go up for sale.
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B.C. Labour Market Outlook
Key Challenges - Demand
• 2.4 million people in B.C.’s labour force.
• 1,126,000 job openings are expected for
the province from 2009 to 2019 – equal
to 47 per cent of the current labour force.
• Approx. 60 per cent of job openings will
be due to replacement demand, 40 per
cent will be due to expansion.
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• Replacement: 676,000 additional jobs will
be vacant due to retirements and deaths.
• Expansion: employment is expected to
grow by 1.8 per cent annually to 2019 –
creating 450,000 new jobs.
Source: B.C. Labour Market Outlook 2009-2019.
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B.C. Labour Market Outlook
Key Challenges - Supply
• Only 650,000 young people in K-12
system today – growth in job openings
will outpace the number of workers
required to support economic growth.
• Number of new entrants is expected to
decline over the outlook, averaging a drop
of 0.4 per cent annually.
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B.C. Labour Force Growth
(average annual growth)
2.5
2.0
1.5
1.0
0.5
0.0
2001-2005 2006-2010 2011-2015 2016-2020 2021-2025 2026-2030
Sources: The Conference Board of Canada; Statistics Canada
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B.C. Employment/Labour Growth
(ave. annual per cent change)
Sources: The Conference Board of Canada; Statistics Canada.
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B.C. Labour Force Participation
Rate (1976-2030, per cent)
Sources: The Conference Board of Canada, Statistics Canada.
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B.C. Immigration Drives L.F. Growth
Source: B.C. Stats 2009.
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B.C. Labour Productivity
(per cent change, compound annual
growth)
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
2001- 2006- 2011- 2016- 2021- 20262005 2010 2015 2020 2025 2030
Sources: The Conference Board of Canada; Statistics Canada.
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B.C. Education Requirements
• Over the next decade, 77 per cent of all jobs
will require some post-secondary education.
Source: B.C. Labour Market Outlook 2009-2019.
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Human Capital
• Improving human capital is essential to
productivity, competitiveness, and
performance of our organizations and
communities.
• Human Capital is one of three key drivers
of productivity and organizational
performance.
• Others are financial capital and physical
capital – machinery and equipment.
Source: The Conference Board of Canada.
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Human Capital and Productivity
• Canada’s productivity performance is
falling relative to other nations, partly
due to our labour and skills shortages.
• Skills shortages often (not always) result
from labour shortages in workplaces.
• Skills shortages also due to gaps,
mismatches and obsolescence, as sectors
and nature of work changes.
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Productivity Drivers
Human capital
Firm-Specific
Factors
Business & Policy
Environment
Global Forces
Trade liberalization
World commodity
price changes
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Political events
Other global events
Source: The Conference Board of Canada
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Innovation
• Innovation is a key to productivity
gains—so hire for it, develop people for
it, and reward it—create a corporate
culture to promote it.
• New products and services can add value
to increase revenues and profit per hour
worked by employees.
• Process, incremental innovations that
improve customer experience also
improve productivity and the bottom line.
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Improve Productivity for Growth
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The Contribution of Learning and Skills
to Business Performance
Sources: Institute for Employment Studies, University of Sussex.
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B.C. Labour Market System
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Elements of
B.C. Labour Market System
1. Accessible and reliable labour market
information to help guide investments
and decision-making.
2. Policy and regulations that provide a
quality working environment to
support workers.
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Elements of
B.C. Labour Market System
3. Coordinated network of organizations
that support connections between
workers and employers, and workers
with training; and
4. Responsive education/training system
that meets provincial & regional
economic needs.
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Meta-Strategies for Addressing
Labour Shortages
1. Increase expertise, skills of workforce by
providing more post-secondary education
and training to the already employed.
2. Increase supply of workers by attracting
international and interprovincial migrants.
3. Increase supply of workers by making
more effective use of under-represented
populations.
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Expand the Skilled Talent Pool:
Focus on Under-represented Populations
1. Older workers – 65 years+
2. Immigrants
3. Women – 15-64 years
4. Disengaged youth – 16-25 years
5. Aboriginal Peoples
6. People with disabilities
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Harnessing Valuable Talent:
1. Older Workers
• Employing strategies that target older
workers, will help close skills gap, e.g.:
– Reduce incentives for early retirement;
– Encourage later and flexible retirement;
– Legislation to counter age
discrimination;
– Help older workers find/keep jobs and
‘re-skill’for late-career transitions.
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Harnessing Valuable Talent:
2. Immigrants
• Immigrants and internationally educated
talent boost economy:
– Generate innovation and creativity;
– Add skilled workers to labour force;
– Enrich our global economic
perspective; and
– Provide connections to foreign
markets.
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Immigrants are Good for Business
• Immigrants are an important source of
population and labour market growth.
• Overall, net migration to B.C. is expected
to remain in 50-60,000 range through to
2019.
• Immigration should be sustained and
increased with careful targeting of skills;
provincial nominee programs and special
programs for grad students can help.
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Harnessing Valuable Talent:
3. Women
• Women: 50.5 per cent of B.C. population.
• The labour force participation rate gap
with men is 10 per cent.
• Women earn less: Can. women working
full time, full year in 2008: $44,700 versus
$62,600 for men—gap of 28.7 per cent.
• Women under-represented in science and
tech at university and in related careers.
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Harnessing Valuable Talent:
4. Disengaged Youth
• Cutting HS drop-out rate and increasing
post-secondary completion can help.
• High impact from targeting “youth-atrisk”: drop outs, in alternate education
programs, Aboriginal, disabilities, or
combinations of these.
• Retaining to HS graduation will increase
flow into more advanced workforce prep.
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Harnessing Valuable Talent:
5. Aboriginals
• 2006: 196,000 Aboriginals in B.C., 4.8 per
cent of prov. population; one-quarter of
population (55,250) is <15.
• Aboriginal pop. lags non-Aboriginal pop.
in education: 2007: 35 per cent of
Aboriginals, 15-24 (not still studying), had
not completed a HS or PSE credential––
vs. 21 per cent of non-Aboriginal youth.
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High Aboriginal Unemployment
Rates
• Aboriginal unemployment rate of 16.1 per
cent in 2009, more than twice
unemployment rate for non-Aboriginals.
• Participation rate in labour force is about
12 per cent lower for Aborig. men and 13
per cent lower for Aborig. women
compared to non-Aboriginals.
• Providing skills training and labour
market integration support is key.
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Harnessing Valuable Talent:
6. Persons with Disabilities
• 355,430 working-age persons with
disabilities in B.C. – many want to work
and have excellent skills and talents.
• Their employment rate is only 59 per cent.
• Number of disabled workers will increase
as aging workers experience disabling
health problems—many should be
retained or brought into workforce.
Sources: B.C. Stats, 2006 PALS survey.
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Implementing a Strategy for Growth
• B.C. recognizes the need to solve the
labour force skills gap that threatens the
province’s future economic growth.
• It has identified the major elements of a
labour force strategy—to attract
immigrants and nurture the skills of B.C.’s
people—that will build the capacity B.C.
requires to sustain economic growth.
• There is no single solution!
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Implementing a Strategy for Growth
• Implementing a sustained skills strategy for
growth should be seen as an investment—
not a ‘cost’.
• This investment takes time to bear fruit—it
is crucial to implement ASAP.
• Business, educators, communities, indivs.
all have major roles to play in partnership
with gov’t.—ongoing collaboration on
labour market solutions is the best way to
make possible the future everyone wants!
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Three Key Labour Market
Priorities for B.C.
• Increase participation of under-represented
and under-utilized people within B.C. – and
get all British Columbians skills they need
to be successful in the labour market.
• Attract top talent from around the world
where gaps in workers and skills arise.
• Improve innovation to enhance productivity
by continuing to support human capital
development.
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