Policy 2011

BOARD APPROVED

January 19, 2011

Enhanced Productivity:   A Key Pillar In An Alberta Labour Strategy

In their 2010 policy document:  “Canada’s Demographic Crunch:  Can under-represented workers save us?” the Canadian Chamber of Commerce identified that looming workforce shortages will be aggravated by inertia in labour productivity growth (i.e. the efficiency with which output is produced for each hour worked).  The paper noted that Canada’s labour productivity is lagging behind that of other industrialized countries.  This report suggested that enhancing labour productivity is a crucial consideration in meeting labour market needs.

It is well-known that Alberta experiences a more volatile economy than other Canadian Provinces, which can cause dramatic fluctuations in unemployment rates. However, even when dips in economic conditions mean that more workers are available to supply the job market, Alberta still realizes a skilled worker deficit in many areas. Immigration, while certainly a much needed supplier of labour, cannot accommodate the ongoing labour needs in this province.

In 2009, Statistics Canada reported that Alberta lost more workers than it gained.  Combine these factors with a continuing increase in the number of Albertans retiring, and it becomes abundantly clear that a multi-pronged Alberta-centric strategy is needed to ensure that future labour market needs in this province can be met.

Improving the productivity of all current and future labour market participants in Alberta must be considered a key pillar in an Alberta Labour Strategy. Alberta Employment and Immigration noted in 2005 that: “High labour productivity is tied to a well-educated work force; it is a pre-condition for the value-added and knowledge-based economy envisioned by the government.”[1]

One of the issues affecting Alberta’s labour productivity is its disturbing high-school dropout rate, with research showing one in five young adults lacks a high-school diploma[2].   Rural and small town Albertans are more likely than their urban counterparts to have less than a high school diploma (33.5% compared to 20.8%). (Statistics Canada, 2006, Census of Population) This high-school dropout rate has a negative impact on the province’s prosperity and vitality.  Specifically, high-school drop outs are more likely to earn less than those with a high-school diploma, to be unemployed, to draw on social assistance and other welfare programs, to end up in jail, to be in poorer health and be at risk for homelessness. Specifically, without a high school education these adults are unable to continue with ongoing learning and represent an under-utilized workforce.  All of these outcomes represent both a higher cost to Albertans and an impediment to prosperity and global competitiveness.

Success in education for Albertan youth is integral to an effective labour force strategy. Education offers young adults a pathway to a life of greater personal fulfillment, and helps them make a stronger contribution to the economy and their community. The lowered earning potential and the increase in social costs represented by high-school non-completion are unacceptable.

Further impacting Alberta’s productivity and ability to participate in a knowledge-based economy is its low participation rate in post-secondary studies. In May 2006, Alberta Advanced Education and Technology published The Final report of the Steering Committee on “A Learning Alberta” in which it reported that Alberta had the third lowest participation rate in post-secondary studies, and ranks fourth in the Country for participation in lifelong learning. Marilyn Chisholm, writing for the Canada West Foundation, reported that the labour force educational attainment in western Canada still lags behind that of several other Canadian provinces as well as our international competitors, with 22% of the Canadian labour force having achieved a university education, whereas the US had a 30% university education rate, and Norway and Denmark rated 29% and 25% respectively.[3]   

It is important to note that of the 29 “in-demand” occupations in Canada, 26 require advanced training and education. Adults who may wish to return to school and advance their training and education, however, face obstacles such as high debt loads and lack of access to relevant learning opportunities in rural and “rurban” (small to mid-sized communities outside of Alberta’s two major centres) communities.

In May 2010, The Red Deer Chamber of Commerce polled the Red Deer business community to discuss the relationship between education and employment/business success. When asked to detail what steps they take to ensure that employees have the necessary education levels, skills and training to perform their duties satisfactorily, 70% of respondents cited training and employer-sponsored education as the number one strategy to ensure staff can function and grow. Further, 60% said that the education level of a potential recruit factors highly in the hiring process. Key findings of the survey were:

1.  Finding workers with relevant skills and education is important but difficult for businesses in the Red Deer region.
2. An under educated workforce adversely impacts staff turn-over rates, corporate growth, productivity, and profitability.
3. Employers more readily hire educated/skilled workers and many maintain a policy of only doing so.
4. Employers believe in training and education and invest heavily in providing this to employees, which is a direct cost to business.
5. The business community overwhelmingly believes that non-completion of high school negatively impacts the success and prosperity of their businesses, and likewise the regional and provincial economies.

Because training and education are key components in a productive work force, Alberta’s “rurban” and rural populations face added disadvantages in both secondary and post-secondary education and training.  Compared to urban Albertans, rural Albertans are about twice as likely to have less than a grade 10 education.  Given the higher rate of rural Albertans not completing high school, general post-secondary attainment rates are also lower in rural regions.  This urban/rural gap is particularly wide in relation to university attainment.

In large urban centres, such as Edmonton and Calgary, 20% of the labour force has obtained a university degree, this rate drops to approximately 8% in rural populations. It is reasonable to presume that “rurban” communities that are larger but have a strong rural presence will have university degree rates that fall in between.  The rates for post-secondary certificates or diplomas are similar at 33% and 32.2%[i]. 

As there is a strong link between learning institutions and economic development, and in fact community viability as a whole,  business in outlying communities, is impacted by limited access to ongoing learning and training opportunities. In order for Alberta to prosper and compete internationally, workers in all Alberta communities need to have access to in-place, cutting edge training and education.   

The Province’s ten-year strategy Building & Educating Tomorrow’s Workforce[4], currently in year 4 of 5, essentially amounts to the provision of ad hoc funding opportunities for industry-based projects for training, largely accessed by associations and labour unions. Although this strategy may provide individual Albertans with opportunities to access learning and training in their local community, often neither workers nor employers are aware of such programs.

 Alberta prides itself in being the most enterprising province in Canada, with a strong focus on entrepreneurship and business in general. However, Alberta perhaps more than any other province, struggles with chronic labour shortages, particularly in sectors requiring specific skills. Alberta’s education system must partner with business to provide students and adult learners with diverse learning opportunities, including strong business and entrepreneurial training, to foster new generations of innovative enterprise. A focus on programs that offer business and entrepreneurial training in Alberta’s schools, which addresses the disparities in access for “rurban” and rural communities, will significantly cultivate a culture of learning and enterprise in all Alberta communities.

In order to compete locally and globally in a knowledge-based, rapidly changing and often challenging economy,  Alberta needs a grass roots holistic approach to improving productivity and should do so by cultivating a province-wide, highly accessible culture of ongoing learning and improvement in which businesses and workers in every Alberta community can participate. It is imperative that all of Alberta’s urban, “rurban” and rural citizens be educated, skilled and equipped to enhance Alberta’s competitive advantage.

Consequently, the Red Deer Chamber of Commerce recommends that the Government of Alberta improve the productivity of all Alberta workers by:

1. 1.    Conducting an audit of programs and options available in urban, rurban and rural regions to assess how learners differ based on community size, structure and culture in order to develop and implement the types of programs and learning opportunities needed to support educational success.
2. 2.    Supporting employers who pay for advanced education and training for employees by:
   1. a.    Creating aggressive incentives, such as tax credits, for employer-supported training[5]
   2. b.    Improving access to e-learning and community-based learning and training opportunities in rurban and rural communities
   3. c.    Creating awareness of “training in place” programs and financial incentives available to businesses and workers through Alberta’s “Building and Educating Tomorrow’s Workforce” strategy
3. 3.    Addressing obstacles that prevent adult learners from accessing ongoing learning and retraining such as cost, lack of learning opportunity availability in certain centres, and limitations in available e-learning opportunities. 
4. 4.    Providing more generous tax credits for individual independent study[6].