Labour Mobility in Canada: Past, Present, Future
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Transcript of Labour Mobility in Canada: Past, Present, Future
Labour Mobility in Canada: Labour Mobility in Canada: Past, Present, FuturePast, Present, Future
Presentation to the Canadian Home Builders’ AssociationFebruary 25, 2009
By Niels VeldhuisDirector, Centre for Labour Markets
The Fraser Institute
Presentation Outline
• The Economics and Benefits of Labour Mobility
• Barriers to Inter-Provincial Mobility
• Reducing Barriers: AIT & Red Seal TILMA Amended AIT (Chapter 7)
The Importance of Domestic The Importance of Domestic MigrationMigration
Source: Statistics Canada (2008), Quarterly Demographic Estimates – July to September 2008
Numbers by source
Province Total immigrationOther
provincesOther countries
Canada 571,525 334,773 236,752
NL 11,302 10,757 545
PEI 4,011 3,017 994
NS 19,232 16,708 2,524
NB 15,571 13,928 1,643
QC 67,828 22,611 45,217
ON 179,496 68,160 111,336
MB 26,513 15,557 10,956
SK 29,315 25,795 3,520
AB 111,769 90,903 20,866
BC 101,147 62,189 38,958
Relative importance of domestic Relative importance of domestic and international migrationand international migration
0%
20%
40%
60%
80%
100%
Per
cen
t
Source: Statistics Canada (2008), Quarterly Demographic Estimates – July to September 2008
Net Migration (1973-2007)Net Migration (1973-2007)
Source: Statistics Canada (2008). Demographic Estimates Compendium 2007.
-40,000
-30,000
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
QC ON AB BC
Average Net Interprovincial Average Net Interprovincial Migration (2003-2007)Migration (2003-2007)
Source: Statistics Canada (2008), Quarterly Demographic Estimates: Canada, Provinces and Territories.
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
In T
ho
usa
nd
s
AB BC PEI NB NS NL SK MB QC ON
Benefits of Inter-provincial Benefits of Inter-provincial Labour MobilityLabour Mobility
• Key to high performing and dynamic labour market is flexibility: free flow of workers is a key factor
• Fosters internal efficiency
• Re-allocates labour: reduces pressure (shortage) and unemployment
• Provides a quicker response that other mechanisms
• Re-allocates existing skills
• Involves constant marginal adjustment
Source: Rafael Gomez and Morley Gunderson (2007), Barriers to the Inter-Provincial Mobility of Labour,
Barriers To Interprovincial Barriers To Interprovincial Labour MobilityLabour Mobility
• Professional occupational licensing and certification
• Government licensing and certifications of trades
• Preferential hiring
• Income security programs
• Employment standards
Regulated Professions and Regulated Professions and OccupationsOccupations
Business • Certified Management
Consultant• Chartered Accountant• Insurance Broker
Health • Dental Hygienist• Dentist• Dietitian and Nutritionist• Midwife• Nurse Practitioner• Pharmacist• Physician [General, Family,
Specialist and Surgeon]• Veterinarian
Natural and Applied Sciences • Chemist• Community Planner• Engineer• Geologist• Land Surveyor
Social Science, Law and Education
• Early Childhood Educator• Guidance Counsellor• Lawyer• Social Worker
Regulated TradesRegulated TradesConstruction Trades • Carpenter• Concrete Finisher• Electrician • Locksmith• Painter and Decorator• Roofer
Industrial Trades • Auto Body Repairer• Automotive Painter• Boilermaker• Industrial Electrician• Machinist
Services Trades • Cook• Hairstylist
Agreement on Internal Trade (AIT)Agreement on Internal Trade (AIT)
• Came into effect in 1995• Implemented to reduce interprovincial
barriers to trade and labour mobility within Canada
• Chapter 7 covers labour mobility with a focus on professions
• Requires governments to:• Eliminate residency requirements• Mutually recognize of occupational
qualifications and reconciliation of differences in occupational standards
• AIT relies on Red Seal Program for trades
Agreement on Internal Trade (AIT)Agreement on Internal Trade (AIT)
• Few occupations were fully mutually recognized by 2001
• No default mechanism
• Weak enforcement: Dispute Settlement Mechanism
Trades: Red Seal ProgramTrades: Red Seal Program• AIT relies on the Red Seal Program
for trades
• Red seal has been the national standard for nearly 50 years
• Covers 50 (of 65) regulated trades
• Interprovincial Standards Red Seal Exam
• Not mutual recognition
Trade Investment Labour Trade Investment Labour Mobility Agreement (TILMA)Mobility Agreement (TILMA)
• April 28th, 2006 – TILMA
• Free trade agreement between AB and BC covering trade, investment, and labour
• Fundamental improvement on AIT
• Contains a default mechanism for labour mobility: mutual recognition
• Dispute resolution
Council of the FederationCouncil of the Federation
Council of the FederationCouncil of the Federation
• July 2008 meeting: “true” mutual recognition by summer 2009
• Similar to TILMA: “…recognition shall be granted expeditiously without further material training, examinations or assessment requirements”
• Enforcement: penalties up to $5 million for non-compliance
Changes to the AIT (Chapter 7)Changes to the AIT (Chapter 7)
• Red Seal Program: continued commitment to the Red Seal Program, as a well-established means of establishing common inter-provincial standards for trades
• Party without occupation standard for a particular occupation may wish to develop such standards in a manor conducive to labour mobility
• Move beyond Red Seal trades so long as more than one jurisdiction has similar occupational standards (matched)
• New dispute resolution
• Labour mobility becomes the default
Other Barriers to MobilityOther Barriers to Mobility
• Employment Insurance– Generous benefits for long periods
– Seasonal workers get extra benefits
– High unemployment areas get higher benefits
• Economic Effects:– Disincentive to move and find employment
– Increase unemployment
– Distort education and training decisions
• What to do…– High unemployment = higher benefits
– Reform: experience rating
• Restrictions on foreign workers– NAFTA applies to professionals, entrepreneurs, and
investors… but not skilled trades people– Skilled workers must meet provincial standards for
temporary work visas
• Economic Effects:– Canadian tests and risk of returning home disincentive to
mobility; for same reason, discourages Canadian employers
• What to do…– Extend labour mobility clause in NAFTA to skilled
trades– E.g. Australia and New Zealand
Other Barriers to MobilityOther Barriers to Mobility
ConclusionConclusion
• Finally making progress on labour mobility
• Governments must recognize benefits of labour market flexibility
• Must recognized non-Red Seal trades – mutual recognition
• Employment Insurance reform
• Foreign workers
Questions & Hopefully Answers…Questions & Hopefully Answers…
Niels VeldhuisNiels VeldhuisDirector of Center for Labour Markets, Director of Center for Labour Markets, Fraser InstituteFraser Institutewww.fraserinstitute.org