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Looking-Ahead: A 10-Year Outlook for the Canadian Labour Market (2006-2015)
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Notes on Projections: Methodology and Detailed Results
Demographic, Labour Force and Macroeconomic Projections: Methodology and Results
Macroeconomic activity
The macroeconomic scenario used in this forecast was developed in cooperation with the Conference Board of Canada, using as a starting point the CBOC's spring 2006 medium-term forecast. The CBOC scenario was then adjusted to reflect a consensus view on certain key variables, including GDP and employment over the five-year periods of 2006-10 and 2011-15.
| 2006-2010 | 2011-2015 | |
| GDP | 2.9% | 2.6% |
| Employment | 1.4% | 0.8% |
The consensus was drawn from a multitude of private and public sector sources, including Consensus Forecasts (private sector consensus), the Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF), Finance Canada (2005 Fiscal Update) and the Bank of Canada. This scenario does not attempt to forecast cyclical fluctuations in the economy beyond the current cycle, with longer-term projections based on structural trends in labour supply, productivity and the components of demand. More information on the macroeconomic assumptions used in the forecast can be obtained from the Strategic Policy Research Directorate, Human Resources and Social Development Canada.
Demography
The Models of Economic-Demographic Systems (MEDS) developed by Denton, Feaver and Spencer of McMaster University were used in specifying the demographic scenario for this labour market projection.
| The number of births is influenced by three factors: 1) the fertility rate (set at 1.5 children per woman); 2) the average age of mothers at the birth of their first child (steady at 29.1 years); and 3) the population of women of childbearing age. With regard to mortality rates, higher living standards and medical advances are expected to continue increasing life expectancy, but at a slower pace. The life expectancy of women was 81.4 years in 1996 and is expected to rise to 86.1 years by 2051. The life expectancy of men was 75.5 years in 1996 and is expected to rise to 82.8 years by 2051. Immigration and emigration rates remained constant at 0.75% and 0.20% of the Canadian population, respectively, throughout the projection period. |
The Canadian population rose from 29.6 million in 1996 to 32.2 million in 2005. It should rise steadily to 35 million in 2015, an increase of 2.8 million over 10 years, compared to the increase of 2.9 million recorded between 1996 and 2005. The average annual growth rate, which was 1.1% between 1996 and 2005, will decline to 0.9% between 2006 and 2015. This slowdown is largely the result of the decline in the natural increase in the population (births minus deaths), which is in turn caused by the combined effect of low fertility rates and the slower increase in life expectancy. Immigration will thus play an increasingly significant role in Canada's population growth.
Immigration is already a significant contributor to population growth in Canada. While the contribution of immigration to population growth is expected to remain relatively stable between 2006 and 2015, it is projected to account for over two thirds (67.5%) of the population increase by 2015 in cumulative terms.
The deceleration in the natural increase will have the direct effect of slowing down the growth of the labour force source population (individuals aged 15 years and over) over the next decade. That growth is expected to decrease from 1.3% during the 1996-2005 period to 1.1% during the projection period.
Labour force
The aging of the population will have an impact on the current labour market by contributing to the aging of the labour force and to an increase in the number of retirements.
The labour force projections are based on a participation rate model developed by HRSDC. The model projects the labour force by age group, gender and educational attainment, using a cohort-based approach. Thus the model follows the rise in the educational level of younger people and assures that these levels are maintained through the projection period. Among the older age groups, the model follows the behaviour of birth cohorts over the years. Some groups, particularly women, participate in the labour market to a greater extent today than women of previous generations. Thus the projected participation rate is influenced by this positive cohort effect. According to Finance Canada,22 this effect should lessen by 2015.
The labour force is expected to increase from 17.3 million people in 2005 to 19.1 million by 2015. This represents an average annual increase of 1.0%, slower than the 1.7% average reported between 1996 and 2005. The overall participation rate is projected to decline to 66.7% by 2015 from 67.2% in 2005, as the impacts of population aging begin to take hold near the end of the present decade.
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Age group 15-24
The youth participation rate declined substantially during the 1990s, down from the peak level recorded in 1989. More youths decided to attend school in the 1990s, as reflected by increases in enrolment rates up to 1997. Since 1997, improved economic conditions have drawn more young people into the labour market, leading to an increase in their participation rate. The youth participation rate is expected to rise gradually from 65.9% in 2005 to 68.5% in 2015, still 2.6 percentage points below the 1989 peak of 71.1%.
Age group 25-54
The core group participation rate should continue to increase, but at a decreasing rate. Over the last few decades, the increased participation rate of people aged 25 to 54 can be largely attributed to the increased participation of women in the labour market. The participation rate of women is expected to continue to rise, but more slowly than in the past. This is in part due to the decreasing impacts of rising educational attainment among women. Labour market pressures resulting from the aging of the population should have a positive impact, particularly on the participation rate for men. The participation rate for core age men is expected to increase slightly from 91.5% in 2005 to 91.9% by 2015. The rate for women should rise more quickly, from 81.1% to 82.3%.
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Age group 55 and over
The participation rate of people aged 55 and over trended down until 1996, mainly due to the declining labour market participation of men in this age group. Since, it has begun to increase, a trend that is expected to continue until 2015, albeit more slowly than in the recent past. Factors contributing to this increase include: increased educational attainment of older workers (who tend to participate more); generational effects (general tendency of people in this age group to participate more than previous generations); better health; and favourable labour market conditions. The labour force for those aged 55 to 64 should continue to increase over the next ten years, as this group's population grows and their labour force participation rate continues to rise, reaching 69.9% for men and 55.2% for women by 2015. Among people aged 65 and over, the participation rate for men is expected to rise from 12.1% in 2005 to 18.8% by 2015, and for women from 5.0% to 8.2% during the same period. Thus the labour force within this group is expected to double over the next 10 years.
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GDP and Employment Projections by Industry: Methodology and Results
Methodology
The industrial scenario used in this forecast was developed in cooperation with the Conference Board of Canada. First, GDP by industry is forecasted based on the outlook for final demand categories of spending in the CBOC's macroeconomic model (Medium-Term Forecasting Model). Secondly, labour productivity by industry is estimated based on its historical trend derived from a Hodrick-Prescott filter. The employment forecast by industry is then derived based on the projected GDP and labour productivity by industry.
Results
| Average Annual Growth (%) 2001-2005 |
Average Annual Growth (%) 2006-2010 |
Average Annual Growth (%) 2006-2015 |
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| GDP | Emp | Prod | GDP | Emp | Prod | GDP | Emp | Prod | |
| All Industry | 2.6 | 1.8 | 0.7 | 2.8 | 1.4 | 1.4 | 2.8 | 1.1 | 1.6 |
| Goods-producing sector | 0.9 | 0.8 | 0.8 | ||||||
| Agriculture | 0.0 | -1.6 | 1.7 | 2.3 | 0.1 | 2.1 | 2.2 | 0.3 | 1.9 |
| Other Primary | 3.0 | 2.2 | 0.8 | 3.6 | 1.7 | 1.9 | 2.9 | 1.0 | 1.9 |
| Logging and Forestry | 2.9 | -4.3 | 7.6 | 1.3 | 0.1 | 1.2 | 0.4 | -0.6 | 1.0 |
| Fishing, Hunting and Trapping | 0.5 | -1.8 | 2.3 | 1.4 | 0.8 | 0.6 | 1.4 | 0.4 | 1.0 |
| Mining (except Oil and Gas) | 2.2 | -1.6 | 3.9 | 2.8 | 0.6 | 2.2 | 2.3 | 0.2 | 2.1 |
| Oil and Gas Extraction | 1.5 | 8.2 | -6.1 | 4.7 | 3.1 | 1.4 | 3.7 | 2.0 | 1.6 |
| Support Act. for Mining and Oil & Gas | 11.1 | 10.9 | 0.3 | 3.6 | 3.0 | 0.6 | 3.1 | 1.9 | 1.2 |
| Construction | 5.3 | 4.7 | 0.6 | 2.4 | 1.7 | 0.7 | 2.1 | 1.3 | 0.8 |
| Manufacturing | 0.6 | -0.4 | 1.0 | 3.4 | 0.3 | 3.2 | 3.4 | 0.6 | 2.8 |
| Food and Beverage Products | 2.0 | 2.6 | -0.6 | 2.4 | 0.3 | 2.1 | 2.5 | 0.4 | 2.1 |
| Wood Product Manufacturing | 3.2 | 0.5 | 2.7 | 1.0 | -1.2 | 2.3 | 1.5 | -0.6 | 2.1 |
| Pulp and Paper | -1.3 | -2.6 | 1.4 | 1.1 | -1.4 | 2.6 | 1.1 | -0.9 | 2.0 |
| Printing | 2.1 | 0.5 | 1.6 | 2.1 | -0.9 | 2.8 | 1.6 | -0.5 | 2.1 |
| Manufactured Mineral Products | 2.3 | -1.4 | 3.8 | 4.2 | 0.8 | 3.3 | 3.9 | 0.6 | 3.2 |
| Rubber, Plastics and chemicals | 2.8 | 1.1 | 1.6 | 4.2 | 0.9 | 3.3 | 4.2 | 1.3 | 2.8 |
| Metal fabrication and machinery | 1.7 | 1.9 | -0.2 | 5.0 | 1.2 | 3.8 | 4.4 | 1.1 | 3.2 |
| Computer, Electronic and Elect. Prod | -6.2 | -6.2 | 0.2 | 5.8 | 2.0 | 3.6 | 6.7 | 2.9 | 3.5 |
| Motor vehicles, trailers and parts | 1.0 | -0.2 | 1.3 | 1.7 | -0.3 | 2.1 | 1.9 | -0.1 | 2.0 |
| Other transportation equipment | -1.8 | -1.4 | -0.1 | 5.1 | 2.8 | 2.0 | 4.4 | 2.4 | 1.8 |
| Other manufacturing | -1.1 | -2.1 | 1.0 | 2.5 | -1.0 | 3.5 | 2.7 | -0.2 | 3.0 |
| Utilities | 0.7 | 1.7 | -1.0 | 3.1 | 0.5 | 2.5 | 2.8 | 0.1 | 2.7 |
| Service-producing sector | 2.1 | 1.6 | 1.2 | ||||||
| Commercial Services | 3.4 | 2.0 | 1.3 | 2.8 | 1.6 | 1.2 | 2.8 | 1.1 | 1.6 |
| Wholesale trade | 5.2 | 2.2 | 2.9 | 3.3 | 1.9 | 1.4 | 3.1 | 1.1 | 2.0 |
| Retail trade | 4.6 | 2.4 | 2.2 | 3.3 | 2.2 | 1.1 | 2.9 | 1.2 | 1.6 |
| Transportation & Storage | 2.6 | 0.5 | 2.0 | 2.5 | 1.4 | 1.0 | 2.5 | 1.0 | 1.5 |
| Finance, Insurance and Real Estate | 3.4 | 2.9 | 0.5 | 2.2 | 1.0 | 1.1 | 2.4 | 0.7 | 1.7 |
| Professional business services | 1.9 | 2.1 | -0.1 | 3.2 | 1.9 | 1.2 | 3.3 | 1.6 | 1.7 |
| Computer System Design Serv. | 4.2 | 1.3 | 2.8 | 4.6 | 2.4 | 2.1 | 4.8 | 2.6 | 2.2 |
| Other Professional Services | 1.0 | 4.1 | -3.0 | 3.6 | 2.1 | 1.4 | 3.8 | 2.1 | 1.6 |
| Manag., Adm. and Other Support | 4.6 | 4.0 | 0.5 | 3.1 | 1.7 | 1.5 | 3.1 | 1.5 | 1.6 |
| Information, culture and recreation | 4.0 | 2.1 | 1.8 | 2.8 | 1.1 | 1.6 | 2.8 | 1.1 | 1.7 |
| Accommodation and food | 0.7 | 1.4 | -0.6 | 2.7 | 1.5 | 1.3 | 2.7 | 1.2 | 1.4 |
| Other services | 3.3 | 0.1 | 3.1 | 1.0 | 0.2 | 0.8 | 1.7 | 0.3 | 1.4 |
| Non-Commercial Services | 1.9 | 2.7 | -0.8 | 3.1 | 2.0 | 1.0 | 2.8 | 1.6 | 1.2 |
| Educational services | 1.4 | 2.6 | -1.1 | 1.9 | 1.1 | 0.8 | 1.8 | 0.8 | 0.9 |
| Health services | 2.2 | 2.8 | -0.5 | 3.9 | 2.6 | 1.3 | 3.5 | 2.0 | 1.4 |
| Public administration | 2.1 | 1.5 | 0.5 | 2.1 | 0.7 | 1.4 | 2.1 | 0.7 | 1.5 |
| Source: HRSDC - SPRD, Labour Market and Skills Forecasting and Analysis Unit, 2006 Reference Scenario | |||||||||
The shift to a knowledge-based economy improves prospects for business services
The computer systems design and related services industry has matured and, as a result, the double-digit growth rates recorded in the 1990s are no longer the norm. Nevertheless, with computer technology now an integral part of the economy, output in this sector is expected to grow at an average annual rate of 4.8% between 2006 and 2015. Not surprisingly, the slowdown in activity in the computer systems sector has resulted in much lower demand for labour; the off-shoring of computer services to India and China has also played a part in the slowdown. Employment is expected to increase at average annual rates of 2.4% between 2006 and 2010 and 2.8% over the following five years when the industry regains its normal pace. However, these rates remain quite low compared to the annual average of more than 20% over the 1994-99 period. Nevertheless, the computer systems design industry is expected to lead all service industries in terms of output and employment growth.
Professional business services (a group that includes legal, accounting, architectural and engineering services) and other professional services (which include scientific, technical and advertising services) experienced strong growth during the second half of the 1990s due to the growing trend among companies towards outsourcing non-essential processes in order to increase operational efficiency, and to the move towards the knowledge-based economy. Between 2000 and 2005, however, employment growth was slightly lower for those two groups. Professional business services faced a decrease in non-residential construction (engineers and architects), lower corporate profits and off-shoring of certain services (accounting services in particular). The slower growth in other professional services was mainly due to decreases in R&D investment and public spending. During the projection period, demand for these services is expected to increase, thanks to a recovery in corporate profits and increased investment in non-residential construction and in research and development. Annual average GDP growth in professional business services and other professional services over the next 10 years should reach 3.3% and 3.8%, respectively. Despite significant productivity gains over the period, employment is projected to experience strong average annual growth of 1.6% for professional business services and 2.1% for other professional services. The latter group will experience greater GDP and employment growth due to increases in R&D investment and in the demand for environmental specialists to deal with this sector's needs.
The information, culture and recreation group (which includes wireless and satellite telecommunication services, broadcasting, Internet and cable services) has experienced moderate growth in recent years. In the mid-1990s, when many of these services were just starting up, they swept the market at lightning speed. Since 2002, however, a number of services in this group have begun to mature, while others were hit hard when the technology bubble burst, especially in the telecommunications, Internet and broadcasting sub-sector. As a result, employment growth has slowed considerably in this industry since 2002. Since the beginning of the present decade, only two sub-sectors have had strong growth — the entertainment, gambling and recreation industry and the performing arts — thanks to the increase in household disposable income. As some of these industries mature and others recover, the rate of GDP growth in this sub-sector (2.8%) is expected to equal that of the overall economy between 2006 and 2015. However, many technological changes in this sector will favour productivity gains over employment, which should limit job growth to 1.1% annually.
The robust growth in the finance, insurance, real estate and leasing sector in recent years is mainly due to the hot real estate market. Since 2001, output has increased at an average annual rate of 3.4% and employment at 2.9% — rates that are higher than the economy-wide average. However, with the expected slowdown in real estate and in mortgage lending, output will grow more slowly than that of the overall economy over the next 10 years. On the other hand, increases in wealth and capital assets and an aging population's need for financial services (especially in wealth management) will benefit this sector. Employment in the industry is expected to record weak growth (0.7% a year) between 2006 and 2015 because the growing use of technology — including automatic bank machines, Internet banking and house listings on the Internet — will reduce the need for labour.
Demographic changes and fiscal outlooks will affect jobs in government and social services
Throughout the 1990s, growth in the health and social assistance sector was minimal as governments in Canada cut back significantly on health care spending in order to bring deficits under control. The emergence of surpluses in the late 1990s resulted in greater spending in health care, leading to a sharp increase in activity in this sector. As a consequence, the health care and social assistance sector has been a major driver of employment growth in the service sector over the past few years. According to the Canadian Institute for Health Information, health care spending has grown by 7.9% a year since 2000, with nearly 300,000 new jobs being created in health care and social assistance — an increase of over 20%. In addition to the improved fiscal position of the provincial and federal governments, the growth in health occupations also stems from greater pressure on the health system from an aging population that requires more and more care and from a growing shortage of health care workers (caused by an insufficient labour supply and an increase in retirements). Also, the increased demand for labour in daycare services, primarily in Quebec, has spurred growth in the social assistance sub-sector. The current situation in health care is projected to continue over the next few years. However, growth in social assistance should slow down somewhat because the network of subsidized daycare centres in Quebec has now matured and the other provinces do not appear to be following Quebec's lead. Overall, growth at rates significantly higher than the national average is anticipated for production (3.5%) and employment (2.0%) during the 2006-15 period.23 This solid performance reflects the commitment by both levels of government to improve Canada's health care system. New technologies in this sector will eventually enable the system to deliver care with less staff, which will result in slowing employment growth over the projection period. In fact, the average annual growth rate will decline from 2.6% between 2006 and 2010 to 1.4% during the following five years.
After sluggish growth in 2000 and 2001, labour market conditions improved considerably in the education sector, with an average annual employment growth rate of 2.6% since 2001. As a result of the improved financial position of governments, the underfunding of the education sector in previous years and the arrival of Ontario's "double cohort," there has been a significant increase in investment in the education system. Activity in education is generally tied to Canada's demographic profile and to fiscal policy. As the population ages and the "echo-boom" generation leaves the 0-24 cohort, the share of the population in that age group will decline significantly. As a result, growth in real output in the education sector is expected to be modest over the projection period (an average of 1.8% a year). The increased output from postsecondary education, due to higher enrolments and greater public investment in colleges and universities, will not effectively offset declining attendance at primary and secondary schools. The need for fewer professors and teachers will result in slow employment growth in the latter years of the forecast period. Employment is expected to grow at 0.8% a year, which is slightly below the projected economy-wide average during the 2006-15 period.
The outlook for public administration is closely linked to the fiscal positions and programs of governments. In the 1990s, the level of activity in this sector either declined or recorded minimal gains as governments grappled with larger fiscal deficits. Employment in the sector declined for eight consecutive years (from 1993 to 2000). The number of employees in public administration has increased by an average of 1.5% a year since 2001, with the federal government leading in that respect. The level of activity for all levels of government should expand at an annual rate of 2.1% over the next decade. It is assumed that governments will run small surpluses and that, as a result, there will not be any significant cutbacks in government services over the longer term. At the same time, budget commitments announced by the federal and provincial governments (up to early 2006) suggest that major increases in public spending are not expected either, except in health care. Over the 2006-15 period, therefore, employment in public administration should increase at an average annual rate of 0.7%.
Employment in the consumer goods and services sector will follow the general trend
Over the past five years, the trade sector has recorded GDP and employment growth above the economy-wide average. Output in wholesale trade was greater than in retail trade. Not only did wholesale trade benefit from a favourable economic performance and a robust housing market, it was also sustained by a strong recovery in sales of machinery and equipment. However, because productivity was higher in wholesale, employment grew slightly faster in the retail industry. The two sub-sectors are expected to report positive results over the 2006-15 period, with average annual GDP growth rates of 3.1% for wholesale trade and 2.9% for retail trade. This buoyant outlook is mainly the result of solid growth in real disposable income — which is projected to advance at an average annual rate of 3.0% over the forecast period — and of relatively strong growth in overall employment. The increase in real disposable income stems not only from higher wages, but also from reduced taxes, including the lowering of the goods and services tax (GST). As a result, households will have more discretionary income to spend at both wholesale and retail outlets. In addition, machinery and equipment investment should remain high throughout the forecast period, spurring growth in wholesale trade. At the same time, however, productivity gains will limit average annual employment growth in retail (1.2%) and wholesale trade (1.1%). Employment growth will be slower in the second half of the forecast period as Internet shopping grows in popularity. Over the long term, the aging of Canada's population will also have a negative effect on the trade sector, as older people will spend more on health care services than on consumer goods.
Activity in the transportation and warehousing industry has experienced significant fluctuations over the past few years. Employment declined in 2002, mainly as a result of the weakness of the U.S. economy and the financial troubles faced by the airline industry. Renewed confidence in air travel in 2003, the robust Canadian economy and the pick-up in activity in the United States helped to overcome the problems caused by the attacks of September 11, 2001, and employment rebounded in 2003. Since then, the almost uninterrupted rise in the value of the Canadian dollar has reduced goods exports to the United States, and rising oil prices have resulted in higher costs in the transportation industry, slowing employment growth again in 2004 and 2005, especially in the trucking industry. Over the next few years, however, the robust US economy is expected to stimulate Canadian exports to that country and to have a positive impact on the transportation and warehousing industry. While a slight decline in the exchange rate is expected, manufacturing companies will adapt to the stronger Canadian currency by investing in machinery and equipment to increase their competitiveness. The airline industry also seems to be recovering from the turbulence of the past few years and should return to a stronger pace of growth. In addition, increased investment in public transit should benefit the transportation industry, thanks to the growing demand for public transportation. The demand for labour should be close to the economy-wide average, with average annual employment growth of 1.0% over the next decade.
The last few years have been difficult for the accommodation and food services industry. After suffering from the effects of SARS (severe acute respiratory syndrome) in 2003, the tourism industry fell victim to the appreciation of the Canadian dollar in 2004 and 2005. The stronger Canadian dollar, particularly relative to the US dollar, had a negative impact on the number of foreign visitors and led many Canadians to travel outside the country because of the dollar's greater purchasing power abroad. The value of the Canadian dollar is expected to remain high over the next few years, making it unlikely that the international travel account will see much improvement in the short term. Nevertheless, strong domestic consumption, stimulated by rising real disposable incomes, should boost output in this industry. In the long term, the consumption of accommodation and food services is projected to increase due to the rising number of retiring baby boomers, who will have more time to spend on travel and other pursuits. Thus average annual GDP growth for this sector should be 2.7% over the period to 2015, with employment expanding by 1.2% a year, putting the industry's performance close to the economy-wide average.
Following the boom in residential construction in the past few years, employment growth should slow in construction and utilities
The housing boom has been the driving force behind the employment gains recorded in the construction industry since 2001. Investment in the residential sector soared during that period, thanks to a strong labour market and to very low interest rates. Although growth remained at high levels in 2005, activity in the residential sector has begun to falter. After several years of sluggish growth, increased investment in non-residential construction has nonetheless helped the construction industry as a whole to maintain its momentum. The rebound in non-residential construction is primarily due to significant investments in the energy sector. In fact, the supply of office space in large urban centres has been well above the demand in recent years, despite the conservative level of building activity. As a result, vacancy rates remain high across Canada, except in some western cities. In net terms, the construction industry as a whole has seen an increase in employment of over 25% (110,000 new jobs) since 2001. In addition to the increase in housing starts, this positive outcome was due to the pick-up of the renovation sector, spurred on by the strong resale market and by the aging of units built during the boom of the late 1980s. The housing boom also had a major spin-off effect on employment in the manufacture and retailing of furniture, retail sales of construction materials, real estate and banking (mortgage market).
The pace of residential construction activity will slow considerably in 2006, and growth in housing construction is then expected to drop to almost nil. In the short term, higher interest rates and a lack of pent-up demand will negatively affect housing activity. Over the long term, the aging of Canada's population is projected to constrain housing activity as the number of people in the age group likely to buy a first home continues to decline. Residential renovation could, however, offset some of the decline in housing starts. Non-residential construction in the energy sector will also give a boost to the industry, thanks to major electricity and oil and gas projects. Overall, employment in the construction industry is expected to grow at an annual average rate of 1.3% from 2006 to 2015. At the same time, there will be further productivity gains as non-residential construction overtakes residential construction, which is more labour-intensive.
Output in the utilities sector is linked to overall industrial output. The slump in the Canadian economy in 2001 and again in 2003 affected real GDP in this sector. Growth in public utilities remained sluggish in 2004 and 2005, while the strengthening Canadian dollar dampened activity in the manufacturing sector. Despite numerous job losses in 2005, real GDP rebounded significantly that year, probably as a result of higher electricity rates in several provinces. As average growth in industrial output is anticipated over the forecast period, GDP growth in utilities should be close to the overall average. Growth will also be associated with higher energy demand in Canada and the United States and with the aging of some existing facilities in the energy sector and in municipal services (water services and sewage treatment). The outlook for the utilities sector also reflects the decision by a number of Canadian provinces to deregulate their electricity markets and to export hydroelectricity to the United States. However, because this is a capital-intensive sector and new technologies have a significant impact on productivity, the demand for new labour over the next decade is expected to be very low (annual average of 0.1%), while output growth, at an average annual rate of 2.8%, will stay close to the economy-wide average.
Employment growth in manufacturing will remain below average thanks to a competitiveness-driven jump in productivity
The year 2004 was relatively good for manufacturing industries, with output and employment alike bouncing back after sluggish output growth and job losses in 2003. Despite the strong Canadian dollar and ongoing trade disputes with the United States, most industries experienced strong performance in 2004, thanks to the strong recovery of the U.S. economy and substantial increases in investment in machinery and equipment. In 2005, however, the steady rise of the Canadian dollar, coupled with higher oil prices and increasingly stiff competition from Asian economies — especially from China —forced Canadian manufacturers to lay off nearly 85,000 people — a 3.7% drop in employment. The industries most affected were "other manufacturing" (textiles, clothing and furniture), wood product manufacturing, printing and motor vehicle manufacturing.
Over the forecast period, average annual growth in manufacturing output is projected to be 3.4%, which is higher than the economy-wide average. This vigorous performance will largely be associated with significant investments in machinery and equipment. Manufacturers are expected to continue to improve productivity to remain competitive in the face of the strong Canadian dollar and intense competition in world markets, with average employment growth being relatively low at an average 0.6% a year. The situation will vary considerably from one industry to another, however. Average annual growth rates of employment over the period to 2015 are expected to remain high in the manufacture of computer and electronic products (2.9%) and other transportation equipment (2.4%). However, job losses can be anticipated in the manufacture of motor vehicles and parts (-0.1%), "other manufacturing" (-0.2%), printing (-0.5%), wood products (-0.6%) and pulp and paper (-0.9%). In the manufacture of rubber, plastics and chemicals and metal fabrication and machinery, growth is projected to be close to the economy-wide average. Employment growth in food and beverage manufacturing and in manufactured mineral products will be slightly below average.
- In the computer, electronic and electric products industry, manufacturers of electronic products over the past two years have finally made it through after the collapse of the world market for telecommunication equipment in the early part of the decade. Between 2001 and 2003, the industry's GDP tumbled by nearly 40%, with over 35,000 jobs disappearing, mainly due to excess capacity in telecommunication companies. The industry has been able to pull itself out of the collapse in demand for computer and telecommunication equipment in 2004 and 2005, with GDP rising by nearly 20%. A stronger economy in the United States and Canada and an increase in corporate profits pushed up capital expenditures over the last two years, paving the way for renewed demand in telecommunications equipment, computers and other electronic products. The recovery of expenditures in hardware and software in the two countries is also the result of equipment obsolescence following three years of underinvestment. However, this strong output growth in 2004 and 2005 was not accompanied by a concurrent increase in employment: after dropping 13% in 2004, employment remained unchanged in 2005. Excess capacity in the telecommunications industry will diminish gradually over the next few years but it will continue to have a negative impact. Continued growth in wireless services and the incipient transition towards IP-based telecommunications systems — the newest trend in the industry — should stimulate sales in telecommunications equipment. As a result, although growth will likely not reach the heights of the 1990s, the computer and electronic products industry should show stronger average annual increases in both GDP (6.7%) and employment (2.9%) over the next decade, relative to other sectors.
- The other transportation equipment group includes aerospace products and parts manufacturing, rail cars and engines, as well as ship and boat building. Aerospace products and parts manufacturing dominates, with roughly three quarters of the sector's value-added output. Over the past few years, the manufacture of other transportation equipment has been significantly affected by the unfavourable conditions faced by the airline industry. In particular, orders for new aircrafts dwindled after the September 11, 2001 attacks, leading to significant declines in output and employment in the aerospace manufacturing industry since 2001. The situation seems to be improving, however, and the order books of aerospace firms have begun to fill up again. A stronger U.S. economy, an increase in defence spending and renewed confidence in airline travel should help bolster the demand for Canadian aerospace products. In addition, the steady decline witnessed in ship and boat building since the 1990s has ended; although growth in shipbuilding will remain muted, at least it will no longer be a drag on the industry's GDP. Finally, changing demographics, increased road congestion and environmental concerns should help to sustain the demand for automated transit systems, including rail. Overall, a strong rebound is expected in other transportation equipment manufacturing over the next few years, with average annual output growth at 5.1% during the 2006-10 period, which is expected to ease to 3.6% between 2011 and 2015 (resulting in an average rate of 4.4% over the 2006-15 period). Employment should grow at an average of 2.4% a year during the forecast period; it is expected to jump considerably from 2007 to 2010 thanks to the recovery in aeronautical manufacturing.
- The rubber, plastics and chemicals industry has been expanding rapidly for over 10 years; the plastics and the pharmaceutical and medication manufacturing sub-sectors in particular are growing steadily. Despite this very positive trend, output and employment growth recently went through a few difficult years, due in part to the appreciation of the Canadian dollar, which is beginning to have a serious impact on exports, and to the strong rise in the price of petroleum products, which has increased production costs in this industry. Thus Canadian companies are unable to reap all the benefits from the robust growth in the U.S. economy. In addition, the slowdown in housing starts will reduce the demand for plastics. However, robustness in residential renovation will largely offset the declining demand for new houses. Over the longer term, the recent restructuring in some sub-sectors of this industry should bring results and put these sectors among the key global players, in particular plastics, pharmaceuticals and biotechnology products. Average annual GDP growth should be 4.2% over the period to 2015, higher than the industry-wide average. However, to contend with increasingly tough foreign competition, the industry will have to invest in order to increase productivity, thereby limiting employment growth. Even so, employment is expected to grow at an annual average rate of 1.3% over the 2006-15 period, which is also slightly above average.
- The fabricated metal and machinery products sector has generally experienced strong growth over the past decade, given that fabricated metal products are an integral component of industrial production. After very solid growth during much of the 1990s, output dropped slightly from 2001 to 2003. GDP in this sector jumped by over 12% in 2004 and 2005 due to the recovery of the manufacturing industry in the United States, where much of Canadian output is destined, and to a significant increase in investment in machinery and equipment. Employment followed the same trend: after declining in 2003, it has grown by nearly 7% over the past two years. In the coming years, output in this sector should experience considerable growth, as investments in machinery and equipment will increase thanks to U.S. economic growth, the abundance of construction projects in the energy sector (particularly in tar sands) and a better performance of corporate profits. Strong demand from emerging countries, China in particular, should also stimulate the fabrication of metal products and machinery. Taken together, these factors should lead to greater exports and increase output by 4.4%. However, strong foreign competition will require companies to invest in order to enhance productivity and remain competitive, constraining employment growth over the next decade to an annual average rate of 1.1%.
- The manufactured mineral products industry mainly includes oil refining and other petroleum products manufacturing, asphalt, cement and concrete manufacturing, glass products manufacturing, iron mills, foundries, steel mills and aluminium smelters. In the past 10 years, output growth in this industry has been strong thanks to improved productivity, with the result that employment declined slightly during that period, with job losses occurring mainly in the primary metals sector. Primary metal production — iron and steel in particular — underwent several years of major restructuring. Output should continue to grow during the forecast period. Robustness in non-residential construction and engineering and infrastructure projects will benefit producers of asphalt, cement, concrete and primary metals such as steel and aluminium. However, higher energy prices greatly hurt the iron, steel and aluminium industries by raising production costs, thereby making Canadian companies less competitive in global markets. Even so, the projected increase in demand for primary metals in some rapidly expanding economies should offset the effects of energy costs and limit the decline in output in Canada's primary metal industry. In addition, the ever greater demand for energy, rising oil prices and population increase will contribute to GDP growth in the oil refining sub-sector throughout the forecast period. Accordingly, strong output growth (at annual average rate of 3.9%) is expected over the next 10 years, but employment growth should remain low (0.6%) because this is a capital-intensive industry with very high productivity and it is currently undergoing consolidation.
- The food and beverage production industry has struggled with a number of obstacles in recent years. Exports suffered from the appreciation of the Canadian dollar, weak economic activity in North America in 2002 and 2003, and the restrictions imposed by our main trading partners on the import of Canadian beef. The high dollar also encouraged foreign firms to compete in Canada's domestic market. Inventories have increased as a result of the lower demand, especially among beverage producers. Surprisingly, employment in this sector has grown more quickly than the economy-wide average, despite the relatively weak output growth. This is due to the proliferation of small specialized businesses — particularly in organic foods, prepared meals and foods for specific diets — to meet an increasingly diverse consumer demand. Over the next decade, output in this industry should rise at a pace slightly below average. Strong global economic performance, mainly in the U.S. economy, combined with specialization in niches that more closely meet the demands of consumers, will help to maintain growth at levels above the rate of demographic increase. However, trade barriers will continue to limit expansion in some industries — dairy products, for example — and constraints on output capacity will reduce export growth in other industries, such as seafood products. In addition, to enhance productivity and remain competitive in global markets, the industry will have to continue modernizing its plants. For those reasons, employment growth is expected to be very weak over the period to 2015 (annual average rate of 0.4%).
- The outlook for the motor vehicle and parts sector is mixed. After record levels in 2000, motor vehicle sales in North America declined slightly over the next few years. Sales continued to hover around that peak thanks to very low interest rates and additional discounts offered by some car manufacturers. Despite stagnating North American sales, Canadian output increased significantly. At the same time, however, employment has declined by more than 4% since 2002. This drop is mainly due to the restructuring undertaken by the Big Three auto makers in order to remain competitive with their Asian and European competitors, resulting in greatly improved productivity at the expense of employment. The number of new vehicles sold in North America since 2000 has been far higher than "normal," resulting in market saturation and a loss of effectiveness of dealers' incentives. The big manufacturers have also been grappling with excess capacity for several years. Growth in the automobile industry is therefore expected to be below the average of the last 10 years.
Among other factors, this gloomy outlook is the result of an anticipated rise in interest rates and of low vehicle replacement needs, as high sales in recent years have lowered the average age of the vehicle stock. In the longer term, the production and employment slowdown in the Canadian automobile and parts industry will mainly be due to excess capacity in the automobile sector worldwide and to the shrinking market share of the Big Three (Ford, General Motors and Daimler-Chrysler are the major employers in the Canadian automobile sector) as well as to increasingly stiff competition from countries such as Mexico, Brazil and China. At 1.9% a year, the increase in output from 2006 to 2015 will be below the economy-wide average. Moreover, Canadian auto makers will make large investments aimed at making production more flexible and increasing plant automation in order to enhance their competitiveness and ensure long-term viability. The restructuring undertaken by car manufacturers, especially GM and Ford, will inevitably lead to layoffs. GM has also announced a reduction in work hours over three years and even plant closures, including one of the two Oshawa plants in 2008. However, the opening of a new Toyota plant in Woodstock, Ontario, will partly offset the job losses at GM, and the net result overall will be a slight drop in employment of -0.1% a year. In short, even though the situation for the motor vehicle and parts industry is difficult, it is far from being the crisis that has worried many analysts and media. - The other manufacturing group, which includes the clothing, textile and furniture sectors, has been facing many difficulties for several years. These industries have been hard hit by international competition, especially from emerging countries such as China, Mexico and India. In addition, while Canadian companies face higher production costs than their Asian and Latin American competitors, the appreciation of the Canadian dollar has raised the price of Canadian products abroad. However, the various sub-sectors have experienced very different outcomes in recent years. In the textile sector, especially clothing, output and employment have dropped as a result of tough foreign competition, which has resulted in lower Canadian exports to the United States. The end of the Agreement on Textiles and Clothing at the beginning of 2005 was a blow to Canadian clothing and textile companies. The decline of these two industries is expected to continue throughout the projection period. In contrast to the textiles and clothing industries, the furniture manufacturing sector benefited from the residential construction boom in recent years, which offset the losses due to foreign competition. The decline in housing starts and house sales over the next few years should, however, limit furniture manufacturing. To contend with foreign competition, companies will have to specialize in high value-added products and make investments to improve productivity. Accordingly, employment growth in this sector is expected to slow down significantly over the forecast period. Finally, other supplies manufacturing (including medical supplies and equipment), which has recorded strong growth over the past decade, will continue to drive growth in other manufactured products over the next 10 years. Overall, for the 2006-15 period, output growth of 2.7% is expected; it will be accompanied by job losses (-0.2%).
- The wood products industry has greatly expanded over the past 10 years. If we exclude 2005, a disastrous year, average annual increases were 6.2% for GDP and 3.9% for employment. This dynamic performance reflects the strength of residential construction and greater access to foreign markets. In addition, the financial losses due to the countervailing duties imposed by the United States against Canadian softwood lumber until 2004 were partially offset by an increase in the production of wood products. In 2005, however, financial pressure resulting from the softwood lumber dispute forced wood product manufacturers, particularly sawmills, to implement mass layoffs. Despite the possibility that the dispute will be resolved in 2006, projections call for a deterioration of the situation relative to the last decade. Not only will the declining supply of lumber and the anticipated slump in housing starts in Canada and across the border have negative repercussions for the industry in the short term, but the aging of the population and the subsequent decline in the demand for housing will also have a significant downward impact on the demand for wood products over the long term. The development of new products made of plastic and steel to replace wood products and fibreboard will also affect output in this sector. And last, in order to remain competitive wood companies will need to invest to enhance productivity, at the expense of employment. Thus a marginal increase in output (annual average rate of 1.5%) and a decrease in employment (-0.6%) can be expected over the period to 2015.
- The last five years have been very difficult for the pulp and paper industry. Output has dropped by more than 6% since 2000, following a long period of growth in the 1990s. This decline, mainly due to weak world demand, higher production costs (particularly for energy) and stiff foreign competition, has forced companies to consolidate and upgrade their facilities. Some have moved away from producing "traditional" papers (such as newsprint) in favour of specialized, high value-added papers. The resulting closure of less efficient plants has resulted in a decline in employment of nearly 13% since 2000. Job losses from industry restructuring are expected to continue over the next few years, despite the upturn in production. Output should rise slightly over the period to 2015 thanks to U.S. economic growth and the increase in demand from China and India. However, the growing use of e-mail and CD-ROMs is expected to reduce the demand for paper and to limit production and employment growth over the long term. Greater use of electronic media will also mean lower demand for magazines and newspapers. Moreover, more powerful machinery and significant investment in technology aimed at enhancing the industry's international competitiveness will increase productivity to the extent that, at the end of the forecast period, all output gains will result from productivity growth. Therefore, employment is expected to decline by an annual average of 0.9% in the pulp and paper industry during the 2006-15 period.
- The outlook for the printing industry is similar to that of the pulp and paper industry. The replacement of print products with the growing use of communication technologies such as e-mail and the Internet (for example, electronic media), coupled with higher production costs and international competition, will constrict output growth. General weakness in demand and a drop in advertising revenues will also have a negative impact on printing. In comparison to the other information media, the market share of print products should decline slowly over the years. Even so, output should be slightly up over the next 10 years due to economic growth in the United States and growing demand for print products from China and India. This growth, however, will be accompanied by an increase in productivity, with printing companies investing in more powerful machinery, and by a drop in labour. As a result, employment in the printing industry is expected to decline by 0.5% over the period to 2015.
Employment growth should be slow in occupations unique to the primary sector, except in oil- and gas-related industries
Employment in the agriculture sector has declined due to a number of negative factors over the past 10 years. The industrialization of farms (with production being concentrated in fewer farms), low prices for wheat on the world market, a severe drought in western Canada, the embargo on Canadian beef by a number of countries including the United States, and the increasing use of labour-saving technologies have resulted in an employment decrease of roughly 20% over the period. Labour market conditions in agriculture have vastly improved since 2002, suggesting that the restructuring of this sector will soon be complete. In 2005, output continued the strong recovery that began in 2003 following the return of more favourable temperatures for agriculture in the western provinces. Over the forecast period, employment growth is anticipated to follow the upward trend that began in 2002, but will remain below the averages expected for most other industries in the Canadian economy. While the cattle industry is expected to recover eventually, the overall agriculture sector will continue to be negatively affected by the ongoing subsidy war between Europe and the United States, which has led to low prices for many grains. Employment in this sector is projected to increase at an average annual rate of only 0.3% over the 2006-15 period. Relatively low growth in output, coupled with rapid gains in productivity resulting from ongoing investment in technology by farmers, will constrain employment growth.
Real output in the fishing sector is expected to increase slightly over the forecast period. The fishing industry is reeling from the Fisheries and Oceans Canada decision to reduce the total allowable catch for crab in 2003. It is also grappling with the closure of the East Coast cod fishery and diminishing lobster catches, both resulting from declining stocks. However, the crab fisheries are expected to recover somewhat in the short term. In fact, almost all East Coast fishing is now focused on shellfish, which is more profitable than groundfish (including cod), but this has resulted in a decline in employment. Over the longer term, real output will continue to be adversely affected by supply constraints. It seems difficult to bring groundfish stocks back to harvestable levels despite the moratoriums, but shellfish stocks are also being depleted. Almost all increases in output will come from improved productivity as opposed to gains in labour activity. In fact, employment is expected to record very weak growth between 2006 and 2015 (annual average rate of 0.4%). Nonetheless, this performance will be better than the results recorded over the past decade, when employment declined by an average of more than 1% a year.
The countervailing duties imposed by the United States on Canadian softwood lumber in 2002 seriously undermined growth in the forestry sector. The negative effects of the dispute continued in 2005. To remain competitive, companies have been making major investments to enhance productivity and reduce production costs, which has meant a decline in employment of nearly 20% since 2001. Housing starts are expected to drop off gradually over the next few years, bringing down the demand for lumber. In addition, environmental concerns and Native land claims will limit the availability of the resource. The reduction in cutting rights in several Canadian regions, including Quebec, will also limit the lumber supply. However, the impact from weaker demand and reduced cutting rights will be short-term only, because cutting rights in British Columbia will be considerably increased to contend with the mountain pine beetle infestation that is affecting one third of pine forests in the northern part of the province. The outlook for the forest industry is therefore not especially bright, and the industry is expected to have the lowest GDP growth rate of all Canadian industries from 2006 to 2015. Moreover, employment is expected to decline over the entire forecast period (annual average rate of -0.6%). As a result, all gains in output over the next few years will occur as result of productivity improvements rather than increased labour activity.
Productivity in the mining sector (excluding oil and gas) has experienced tremendous growth over the past 10 years, except in 2005 when productivity declined, with employment benefiting. Thus, even though output has increased by nearly 25% since 1996, employment in the mining industry has dropped by more than 25%. Several factors explain this rise in productivity: greater investments in machinery and equipment by companies, significant improvements in mineral extraction methods and technology, and the large-scale mining of new types of ore (including diamond, potassium and uranium). At the same time, falling prices for certain raw materials have led to less exploration. The rise in prices for raw materials, which began in 2004 and should continue over the coming years, combined with renewed economic growth in the United States and strong demand from China, will help mining exploration and operations in Canada. The recent development of the diamond industry in Canada's North will continue to help boost production and jobs in mining. This sector will also benefit from the development of the Voisey's Bay nickel-copper-cobalt deposits in Newfoundland and Labrador. The construction of the open-pit mine and mill/concentrator processing plant at the site is now complete and the production of concentrate began in 2006. Finally, the demand for uranium and potassium should also be buoyant over the next few years. Mining GDP is expected to jump significantly from 2006 to 2008, resulting in an annual increase of 2.3% from 2006 to 2015. However, greater competition from Australia and some Latin American countries, coupled with strong productivity gains will limit employment growth, which is expected to average 0.2% over the next 10 years.
The oil and gas extraction industry has been booming for several years due to soaring oil prices and strong world demand, which have spurred oil exploration and led companies to consider exploiting non-conventional sources (including tar sands). Oil and gas companies have begun investing heavily in the exploration of new sources and in the preparation of tar sand extraction areas. These investments have contributed to a significant rise in employment in oil and gas extraction since 2001 (8.2% a year) and to a burst of activity in related industries such as support activities for mining and oil and gas extraction and non-residential construction. However, since oil extraction from these sources is not significant yet, output in the oil and gas industry has not increased much over the past five years (1.5% a year). Oil extraction from tar sands should proceed at a faster pace in 2006. Industry output in 2006 will be particularly high since it will be the first complete year of operation of Newfoundland's White Rose offshore platform. As a result, real output in the oil and gas extraction industry is forecast to increase by an annual average rate of 3.7% over the period to 2015. Oil and natural gas prices are expected to remain high over the short and medium term, thanks to growing demand and heightened geopolitical tensions. Natural gas producers in Alberta and British Columbia will take advantage of sky-high commodity prices to drill record numbers of new wells. Growth will also be very strong (3.1%) in the support activities for mining, and oil and gas extraction group, which includes subcontracting by oil companies, primarily for drilling. However, total oil production in the industry will experience limited growth, even if the price of crude oil remains very high. Most analysts believe that the depletion of the reserves in the Western Canada Sedimentary Basin (WCSB) will limit output over the medium term. Oil production from undersea deposits in Newfoundland (Hibernia, Terra Nova and White Rose in 2006 and Hebron in 2009) will partly offset the declining supply of conventional sources in the Canadian West. While increases in tar sands production will also ensure that real growth will be maintained over the long term, the 5%-to-8% growth performance recorded in the early 1990s is not expected to be repeated. Average annual employment growth should be 2.0% over the period to 2015 in the oil and gas extraction industry and 1.9% in support activities.
Employment Projections by Occupation: Methodology and Results
Methodology
The forecast of employment by occupation is obtained by projecting the share of an occupation within the total employment of a given industry. Over 4,500 equations (140 occupations by 33 industries) are estimated. Each occupational share is estimated using the lagged values of that share (to capture long-term trends) and an estimate of the cyclical position of the industry (to capture short-term cyclical effects).
Results
For employment projections by occupation, click here
Retirement Projections: Methodology and Results
Methodology
Since there is no comprehensive dataset capable of providing reliable detailed information on retirements, historical occupational retirements are estimated using a three-step approach:
- Annual retirements at the aggregate level are derived using the Longitudinal Administrative Databank (LAD), with those aged 50 and over separating from a job and remaining non-employed for at least three consecutive years being classified as retired.24
- Occupational retirements are derived using the Labour Force Survey (LFS), because the LAD contains no occupational detail. Annual occupational retirements from the LFS are simply estimated as the average annual number of employed workers within five years of the LFS median retirement age.
- The LFS occupational retirement estimates are then normalized to ensure that they sum to the aggregate retirement estimate from the LAD.
Annual retirements are projected using a top-down approach:
- Aggregate retirements are forecasted in three steps:
- Employment forecasts by age group and gender are derived by making assumptions concerning gender- and age-group-specific employment rates.
- Retirement rates by gender and age are projected using an econometric model that takes into consideration various determinants of the retirement decision, including education, wealth and labour demand.
- A retirement level is then projected by multiplying the forecasted age- and gender-specific retirement rates by the age- and gender-specific employment forecast.
- Retirements by occupation are projected by aging the employment profile of an occupation forward and calculating the average annual number of employed workers within five years of that occupation's median retirement age, which is assumed to remain constant over the forecast period. The different occupational retirement estimates are then normalized to ensure that they sum up to the aggregate retirement forecast.
Results
The number of retirements from employment in the Canadian economy is expected to rise markedly over the next decade: the annual retirement rate, calculated as the number of retirements divided by the level of non-student employment, is expected to rise steadily from 2.1% in 2005 to 2.6% in 2015, resulting in approximately 3.8 million retirements over the 2006-15 period.
The aging of the population is the main contributing factor to this upward trend in retirements, as the share of the adult population aged 55 and over is expected to reach 35% in 2015, up from 25% in 1990 and 29% in 2005.
Occupations with the strongest retirement pressures
The projected number of retirements within each occupation is primarily determined by the interaction of two variables: the distribution of the workforce by age and the average age of retirement. Retirement pressures should be highest in occupations with an older workforce and/or where the retirement age is relatively low. In 2005, the average age of employed workers was 39 years, while the median retirement age was 61.
Occupations requiring the qualifications needed for management positions and those usually requiring a university education are expected to be most affected by retirement pressures over the 2006-15 period. On average, 2.8% of workers in management occupations are expected to retire each year, primarily because the workforce is older (44 years old). The key management occupations pushing the retirement rate to above-average levels include managers in health, education social and community services, and legislators and senior management.
Workers in occupations usually requiring university education are also expected to experience an above-average annual retirement rate of 2.5% over the next decade, given their lower-than-average retirement age of 60 and their above-average employment age of 41. Elementary/secondary school teachers and educational counsellors, college and other vocational instructors, nurse supervisors and registered nurses and librarians, archivists, conservators and curators are the main occupations leading to the above-average retirement rate among occupations in this category.
Occupations with weak retirement pressures
Workers in occupations usually requiring on-the-job training have the lowest projected retirement rate of all (2.1%). This is attributable to their relatively young workforce (34 years of age) and their above-average retirement age (63 years). Sales and service occupations, including cashiers, food counter attendants and helpers, and other sales and related occupations, are the key occupations leading to this lower-than-average retirement rate.
The table below highlights the retirement results for three-digit NOC occupations.
| Total Retirements (000s) 2006-2015 | Retirement Rate 2006-20015 (AAR1) | Median Retirement Age | Average Employment Age | Age Gap2 | |
| Total | 3,801 | 2.4% | 61 | 39 | 22 |
| 001 Legislators and senior management | 45 | 4.7% | 60 | 48 | 12 |
| 011 Managers in administrative services | 35 | 2.8% | 60 | 43 | 17 |
| 012 Managers in financial and business services | 27 | 2.9% | 61 | 43 | 18 |
| 013 Managers in communication (except broadcasting) | 4 | 2.7% | 61 | 42 | 19 |
| 021 Engineering, science and information systems managers | 15 | 2.3% | 61 | 42 | 19 |
| 031 Health, education, and social and community services managers | 51 | 4.9% | 57 | 46 | 11 |
| 041 Managers in public administration | 16 | 5.9% | 59 | 47 | 12 |
| 051 Art, culture, recreation and sport managers | 4 | 3.6% | 59 | 42 | 17 |
| 061 Sales, marketing and advertising managers | 30 | 2.2% | 61 | 42 | 19 |
| 062 Managers in retail trade | 83 | 2.3% | 64 | 44 | 20 |
| 063 Managers in food service and accommodation | 43 | 2.3% | 65 | 44 | 21 |
| 064 Managers in protective service | 2 | 3.8% | 61 | 45 | 16 |
| 065 Managers in other services | 5 | 3.2% | 61 | 42 | 19 |
| 071 Managers in construction and transportation | 39 | 2.4% | 63 | 45 | 18 |
| 072 Facility operation and maintenance managers | 9 | 2.1% | 63 | 42 | 21 |
| 081 Primary production managers | 2 | 2.2% | 63 | 44 | 19 |
| 091 Managers in manufacturing and utilities | 23 | 2.7% | 63 | 45 | 18 |
| 111 Auditors, accountants and investment professionals | 77 | 2.2% | 62 | 42 | 20 |
| 112 Human resources and business service professionals | 48 | 3.0% | 61 | 44 | 17 |
| 121 Clerical supervisors | 45 | 3.5% | 58 | 41 | 17 |
| 122 Administrative and regulatory occupations | 111 | 3.2% | 59 | 43 | 16 |
| 123 Finance and insurance administrative occupations | 62 | 2.6% | 62 | 43 | 19 |
| 124 Secretaries, recorders and transcriptionists | 100 | 4.3% | 60 | 44 | 16 |
| 141 Clerical occupations, general office skills | 67 | 2.8% | 61 | 39 | 22 |
| 142 Office equipment operators | 16 | 3.0% | 60 | 38 | 22 |
| 143 Finance and insurance clerks | 95 | 2.5% | 60 | 39 | 21 |
| 144 Administrative support clerks | 68 | 2.7% | 60 | 40 | 20 |
| 145 Library, correspondence and related information clerks | 33 | 1.6% | 60 | 35 | 25 |
| 146 Mail and message distribution occupations | 28 | 3.1% | 62 | 40 | 22 |
| 147 Recording, scheduling and distributing occupations | 48 | 1.9% | 62 | 38 | 24 |
| 211 Physical science professionals | 8 | 2.5% | 61 | 42 | 19 |
| 212 Life science professionals | 5 | 2.1% | 61 | 40 | 21 |
| 213 Civil, mechanical, electrical and chemical engineers | 29 | 2.1% | 62 | 42 | 20 |
| 214 Other engineers | 12 | 1.7% | 63 | 41 | 22 |
| 215 Architects, urban planners and land surveyors | 8 | 2.4% | 63 | 44 | 19 |
| 216 Mathematicians, statisticians and actuaries | 1 | 1.7% | 63 | 39 | 24 |
| 217 Computer and information system professionals | 33 | 1.0% | 63 | 38 | 25 |
| 221 Technical occupations in physical sciences | 7 | 2.1% | 61 | 38 | 23 |
| 222 Technical occupations in life sciences | 9 | 2.2% | 61 | 39 | 22 |
| 223 Civil, mechanical and industrial engineering technicians | 14 | 1.9% | 61 | 39 | 22 |
| 224 Electronics and electrical engineering technicians | 28 | 2.0% | 61 | 37 | 24 |
| 225 Technical occupations in architecture, drafting, etc. | 10 | 1.9% | 61 | 37 | 24 |
| 226 Other technical inspectors and regulatory officers | 14 | 2.8% | 61 | 44 | 17 |
| 227 Transportation officers and controllers | 8 | 2.7% | 61 | 42 | 19 |
| 228 Computer and information system technicians | 10 | 0.9% | 61 | 36 | 25 |
| 311 Physicians, dentists and veterinarians | 21 | 2.0% | 67 | 45 | 22 |
| 312 Optometrists, chiropractors and other health professions | 4 | 2.5% | 61 | 44 | 17 |
| 313 Pharmacists, dietitians and nutritionists | 8 | 2.0% | 61 | 41 | 20 |
| 314 Therapy and assessment professionals | 7 | 1.4% | 61 | 38 | 23 |
| 315 Nurse supervisors and registered nurses | 99 | 3.2% | 59 | 43 | 16 |
| 321 Medical technologists and technicians | 22 | 2.3% | 60 | 40 | 20 |
| 322 Technical occupations in dental health care | 5 | 1.7% | 60 | 38 | 22 |
| 323 Other technical occupations in health (except dental) | 29 | 2.5% | 60 | 40 | 20 |
| 341 Assisting occupations in health services | 62 | 2.2% | 62 | 40 | 22 |
| 411 Judges, lawyers and notaries | 14 | 1.8% | 67 | 44 | 23 |
| 412 University professors and assistants | 23 | 2.3% | 64 | 39 | 25 |
| 413 College and other vocational instructors | 34 | 3.7% | 61 | 44 | 17 |
| 414 Secondary and elementary school teachers and counsellors | 159 | 3.6% | 57 | 41 | 16 |
| 415 Psychologists, social workers and clergy | 47 | 3.4% | 60 | 43 | 17 |
| 416 Policy and program officers | 35 | 2.5% | 60 | 41 | 19 |
| 421 Paralegals, social service workers, etc. | 62 | 1.7% | 62 | 38 | 24 |
| 511 Librarians, archivists, conservators and curators | 7 | 4.8% | 61 | 46 | 15 |
| 512 Writing, translating and public relations professionals | 24 | 2.1% | 63 | 41 | 22 |
| 513 Creative and performing artists | 22 | 2.2% | 63 | 40 | 23 |
| 521 Technical occupations in libraries, archives, etc. | 6 | 3.4% | 60 | 41 | 19 |
| 522 Photographers, graphic arts technicians, etc. | 7 | 1.5% | 62 | 37 | 25 |
| 523 Announcers and other performers | 1 | 1.1% | 62 | 35 | 27 |
| 524 Creative designers and craftspersons | 18 | 1.8% | 62 | 39 | 23 |
| 525 Athletes, coaches, referees and related occupations | 7 | 1.3% | 62 | 27 | 35 |
| 621 Sales and service supervisors | 44 | 1.8% | 62 | 37 | 25 |
| 622 Technical sales specialists in wholesale trade | 25 | 1.9% | 63 | 41 | 22 |
| 623 Insurance and real estate sales occupations | 47 | 2.7% | 64 | 45 | 19 |
| 624 Chefs and cooks | 19 | 1.0% | 66 | 34 | 32 |
| 625 Butchers and bakers | 11 | 1.6% | 64 | 35 | 29 |
| 626 Police officers and firefighters | 33 | 3.4% | 55 | 39 | 16 |
| 627 Technical occupations in personal service | 21 | 2.1% | 62 | 39 | 23 |
| 641 Sales representatives in wholesale trade | 53 | 2.1% | 63 | 41 | 22 |
| 642 Retail salespersons and sales clerks | 91 | 2.1% | 62 | 33 | 29 |
| 643 Occupations in travel and accommodation | 16 | 2.1% | 59 | 37 | 22 |
| 644 Tour and recreation guides and casino occupations | 4 | 2.1% | 59 | 36 | 23 |
| 645 Occupations in food and beverage service | 26 | 1.3% | 59 | 29 | 30 |
| 646 Other occupations in protective service | 10 | 3.0% | 59 | 39 | 20 |
| 647 Childcare and home support workers | 62 | 3.7% | 60 | 40 | 20 |
| 648 Other occupations in personal service | 9 | 1.8% | 59 | 35 | 24 |
| 661 Cashiers | 29 | 1.4% | 63 | 28 | 35 |
| 662 Other sales and related occupations | 26 | 1.6% | 63 | 30 | 33 |
| 664 Food counter attendants and helpers | 27 | 1.6% | 63 | 28 | 35 |
| 665 Security guards and related occupations | 26 | 2.7% | 65 | 41 | 24 |
| 666 Cleaners | 125 | 3.1% | 62 | 42 | 20 |
| 667 Travel, accommodation and recreation attendants | 4 | 2.1% | 63 | 31 | 32 |
| 668 Other elemental service occupations | 15 | 3.3% | 64 | 40 | 24 |
| 721 Contractors and supervisors, trades and related | 67 | 2.9% | 61 | 44 | 17 |
| 722 Supervisors in railway and motor transportation | 12 | 4.0% | 61 | 45 | 16 |
| 723 Machinists and related occupations | 15 | 1.9% | 62 | 40 | 22 |
| 724 Electrical trades and telecommunications occupations | 46 | 3.1% | 58 | 40 | 18 |
| 725 Plumbers, pipefitters and gas fitters | 13 | 2.1% | 62 | 39 | 23 |
| 726 Metal forming, shaping and erecting occupations | 27 | 1.9% | 62 | 39 | 23 |
| 727 Carpenters and cabinetmakers | 24 | 1.8% | 63 | 39 | 24 |
| 728 Masonry and plastering trades | 9 | 1.4% | 62 | 37 | 25 |
| 729 Other construction trades | 18 | 2.0% | 62 | 39 | 23 |
| 731 Machinery and transportation equipment mechanics | 52 | 2.8% | 61 | 42 | 19 |
| 732 Motor vehicle mechanics | 29 | 1.7% | 62 | 38 | 24 |
| 733 Other mechanics | 6 | 2.0% | 62 | 39 | 23 |
| 734 Upholsterers, tailors, shoe repairers, etc. | 15 | 4.7% | 60 | 47 | 13 |
| 735 Stationary engineers and power system operators | 10 | 3.8% | 60 | 44 | 16 |
| 736 Train crew operating occupations | 5 | 3.9% | 60 | 45 | 15 |
| 737 Crane operators, drillers and blasters | 5 | 3.5% | 60 | 42 | 18 |
| 738 Printing press operators, commercial divers, etc. | 12 | 3.2% | 60 | 41 | 19 |
| 741 Motor vehicle and transit drivers | 120 | 2.5% | 64 | 43 | 21 |
| 742 Heavy equipment operators | 19 | 2.0% | 65 | 43 | 22 |
| 743 Other transport equipment operators | 5 | 2.5% | 63 | 41 | 22 |
| 744 Other installers, repairers and servicers | 12 | 1.8% | 61 | 36 | 25 |
| 745 Longshore workers and material handlers | 38 | 1.9% | 61 | 37 | 24 |
| 761 Trades helpers and labourers | 12 | 1.2% | 63 | 32 | 31 |
| 762 Public works and other labourers | 6 | 2.4% | 63 | 40 | 23 |
| 821 Supervisors in logging and forestry | 2 | 2.6% | 63 | 43 | 20 |
| 822 Supervisors in mining, oil and gas | 4 | 1.7% | 63 | 42 | 21 |
| 823 Underground miners, oil and gas drillers, etc. | 6 | 1.4% | 63 | 40 | 23 |
| 824 Logging machinery operators | 3 | 2.4% | 63 | 41 | 22 |
| 825 Contractors, operators and supervisors in agriculture | 68 | 2.7% | 69 | 48 | 21 |
| 826 Fishing vessel masters and skippers | 3 | 1.7% | 68 | 44 | 24 |
| 841 Mine service workers and operators in oil | 1 | 1.0% | 63 | 34 | 29 |
| 842 Logging and forestry workers | 5 | 3.2% | 63 | 42 | 21 |
| 843 Agriculture and horticulture workers | 10 | 1.3% | 67 | 32 | 35 |
| 844 Other fishing and trapping occupations | 1 | 0.7% | 68 | 37 | 31 |
| 861 Primary production labourers | 10 | 1.3% | 63 | 32 | 31 |
| 921 Supervisors, processing occupations | 29 | 3.7% | 58 | 43 | 15 |
| 922 Supervisors, assembly and fabrication | 24 | 4.0% | 58 | 42 | 16 |
| 923 Central control operators in manufacturing and processing | 8 | 3.3% | 58 | 42 | 16 |
| 941 Machine operators: metal and mineral products | 7 | 2.1% | 63 | 40 | 23 |
| 942 Machine operators: chemical, plastic and rubber | 12 | 1.4% | 64 | 40 | 24 |
| 943 Machine operators: pulp and paper products | 11 | 1.8% | 64 | 40 | 24 |
| 944 Machine operators: textile processing | 4 | 2.3% | 64 | 42 | 22 |
| 945 Machine operators: fabric, fur and leather | 15 | 3.2% | 64 | 44 | 20 |
| 946 Machine operators: food, beverage and tobacco | 15 | 1.8% | 64 | 39 | 25 |
| 947 Printing machine operators and related occupations | 4 | 1.5% | 64 | 38 | 26 |
| 948 Mechanical, electrical and electronics assemblers | 30 | 2.7% | 60 | 40 | 20 |
| 949 Other assembly and related occupations | 16 | 1.5% | 64 | 38 | 26 |
| 951 Machining, metalworking and woodworking operators | 22 | 1.5% | 64 | 39 | 25 |
| 961 Labourers in processing, manufacturing and utilities | 39 | 2.0% | 61 | 37 | 24 |
| Source: HRSDC, Strategic Policy Research Directorate, 2006 Scenario Reference. 1AAR: average annual retirement rate; the annual retirement rate is calculated as the number of retirements divided by the level of employment in a given year. 2The age gap is an indicator of retirement pressures. Typically, the greater the difference between the retirement age and the employment age in a given occupation, the lower the retirement rate. |
|||||
School Leavers Projections: Methodology and Results
Methodology
The School Leavers Model (SLM) produces a forecast of the number of people who have left the education system in order to join the labour force. The SLM:
- projects broad enrolments and graduates by four main levels of education: secondary, trade and vocational, community college, and university. The data are obtained from Statistics Canada's Centre for Education Statistics and are available until 1999 for the trade and vocational, and community college levels, 2003 for the university level and until 2004 for the secondary school level.25 The projections consider only full-time students. This is done to exclude persons working part-time or returning to school for re-training from being counted as new entrants. The major components excluded are undergraduate and graduate university students enrolled in programs leading to a certificate or diploma.
- derives an estimate of the number of discontinuants as not all enrolees complete their studies (for example, if a program takes four years to complete, the number of discontinuants is derived as the number of enrolees four years earlier minus the number of graduates in a given year).
- filters out those graduates (and discontinuants) who continue their education or do not participate in the labour force, to obtain the number of school leavers by educational level (for example, graduates from a bachelor's program going on to graduate studies are netted out).
- distributes these school leavers among occupations:
- for graduates who have not completed postsecondary education (individuals with less than high school, high school graduates and individuals with only some postsecondary education), information from the Labour Force Survey is used;
- for graduates who have completed postsecondary education (college, trade or vocational, university), results from the National Graduate Surveys (NGS)26are used. It is important to note that an "ex ante" approach was used: for each field of study (FOS) within an educational level, only occupations relevant to this FOS were retained. For example, because a master's graduate in philosophy is not expected to work as a cashier (even though some may end up doing so), this occupation was not considered relevant for this FOS.
Results
Here are key results from the SLM projections.
Enrolments
Total first-year enrolments27 are expected to remain flat over the 2006-15 period. This follows a 0.7% average annual growth recorded over the preceding decade. This trend is closely tied to the slower growth of the population aged 15 to 24, from 0.9% between 1996 and 2005 to an estimated decline of 0.3% over the forecast period.
First-year secondary school enrolments are expected to decline over the forecast period due entirely to demographic factors (average annual growth rate of -1.2%). Indeed, the number of 13- and 14-year olds is expected to decline at an annual rate of 1.5% over the forecast period.
Meanwhile, first-year community college career program and university enrolments will continue their upward climb (average annual growth rates of 1.0% and 1.1%, respectively), despite the slight decline expected for the population aged 18 to 24 (0.02%) over the forecast period. Trade and vocational enrolments are expected to grow at an annual rate of 0.7%.
Graduates
The total number of graduates from the education system will increase over the forecast period, from 643,000 in 2005 to 674,000 in 2015. This represents an average annual growth rate of 0.5%, well below the 1.2% average recorded between 1996 and 2005.
Due to a declining youth population, the number of high school graduates will begin to diminish after 2009. This is consistent with the projected decline in secondary school enrolments.
Graduations from the postsecondary system are expected to rise. Community colleges and universities will continue to supply highly educated graduates — with respective average annual growth rates of 1.7% and 1.2%. The increase in graduates corresponds with the strength of enrolments in community colleges and universities, both historically and in the forecast period. Trade and vocational graduations are expected to remain fairly flat over the forecast period.
Discontinuants
The total number of discontinuants ("dropouts") from the education system will increase over the forecast period, from 252,000 in 2005 to 254,000 in 2015.
Discontinuation from secondary school is expected to decline slightly over the forecast period, continuing a long-run trend observed since the late 1980s.
In community colleges and universities, discontinuation will remain flat because completion rates are expected to rise for these levels of schooling. Trade and vocational discontinuants are expected to increase over the forecast period as a result of slight declines in completion rates.
Graduates by field of study
The SLM disaggregates the population of postsecondary graduates by field of study before moving on to occupational conversions. These breakdowns are only considered for the three major postsecondary blocks because secondary and some postsecondary leavers are not considered to have a sufficient level of specialization. In all, 49 fields of study are considered for trade and vocational graduates, 55 for community college graduates and 58 for those at the university level (Bachelor, Master's and Ph.D.). Based on the conclusion that the field-of-study composition tends to stay fairly stable over time, the SLM keeps these distributions fixed over the forecast period.28
School leavers by level of education
School leavers represent the sum of individuals who have graduated (or who have dropped out from a higher education level), are not pursuing further education, and are participating in the labour market.29
Over the forecast period, the total number of school leavers is expected to increase from 536,000 in 2005 up to 572,000 in 2015 — an average annual growth rate of 0.7%. This is below the 1.2% growth rate recorded over the previous 10-year period (1996-2005). The projected growth surpasses the expected average annual increase of 0.2% in the population aged 17 to 29 over the same period.
Historical trends in the number of school leavers by level of education will continue. The most important rise in the number of school leavers is expected to take place at the university and college levels. The number of school leavers with a university education is expected to increase from 179,000 in 2005 to 201,000 in 2015 — an average annual growth rate of 1.2%. For college graduates, the increase is expected to be from 101,000 to 119,000 over the same period — an average annual growth rate of 1.7%.
The number of school leavers with some post secondary education30 or with trade and vocational schooling is expected to remain largely unchanged over the forecast period. Declines are expected to continue for those with secondary schooling or less, from 145,000 in 2005 to 139,000 in 2015 (-0.5%).
Accordingly, the proportion of school leavers with completed postsecondary education is expected to increase from 57.8% in 2005 to 61.1% in 2015. This pattern of rising educational attainment follows historical trends and reflects the growing need for knowledge workers in the economy.
Immigration Projections: Methodology and Results
Methodology
The immigration model uses three steps to estimate the number of recent immigrants who become new job seekers:
- First, the population of recent immigrants is projected. Immigration is assumed to increase proportionally with the Canadian population at an average rate of 0.75% per year. The projection of the Canadian population is obtained using the MEDS demographic model.31
- The projected labour force of recent immigrants is derived on the basis of the historical proportion of immigrants who are 15 years and over and the historical participation rates obtained from the Census.
- Recent immigrants entering the labour force are distributed among occupations on the basis of the 2001 Census, which contains information on the occupational distribution of immigrants who entered the Canadian labour market between 1996 and 2001.32
Results
Here are key results from the immigration projections.
Immigrant population
Over the past decade, 2.2 million immigrants have settled in Canada. On an annual basis, this represents about 221,000 immigrants or 0.72% of the total population. The graph displays the annual number of immigrants in recent years as well as the immigration rate (the annual number of new immigrants over the total Canadian population).
The Canadian population is expected to increase from 32.3 million in 2005 to 35.0 million by 2015. The number of international immigrants is projected to grow proportionally from 244,600 in 2005 to 260,700 in 2015.
Immigrant labour force
Immigrants are younger than the Canadian population. About 58% of immigrants in 2005 were aged between 15 and 39 years, compared to 35% for the population as a whole. In 2005, over 77% of all immigrants were aged 15 and over.33 The population of immigrants 15 years and older is projected to increase from 186,500 in 2005 to 202,920 by 2015.
As shown in the table, immigrants aged 15 and over who entered the country over the past five years (1996-2000) had a participation rate of 64.8% — a significant increase from 59.4% observed over the previous five-year period. This rate is applied to the population of immigrants 15 years and older to obtain the immigrant labour force. Approximately 120,900 new immigrants were employed or actively looking for a job in 2005 — a number that is expected to climb to about 131,500 in 2015.
| 1996 Census | 2001 Census | |||||
| Participation rate | Employment rate | Unemployment rate | Participation rate | Employment rate | Unemployment rate | |
| Total Canadian population | 65.5 | 58.9 | 10.1 | 66.4 | 61.5 | 7.4 |
| Non-immigrant population | 66.9 | 60.2 | 9.9 | 68.0 | 62.9 | 7.4 |
| Immigrant population | 60.7 | 54.3 | 10.5 | 61.4 | 56.9 | 7.4 |
| Entered within the past five years | 59.4 | 48.8 | 18.0 | 64.8 | 56.5 | 12.7 |
| Source: Statistics Canada, 1996 and 2001 Censuses | ||||||
Immigrant labour force by educational level
Recent immigrants are more educated than the Canadian-born labour force. The proportion is especially high for holders of university degrees: 42.1% of recent immigrants in the labour force had a university degree in 2001, compared with 18.5% for the Canadian-born labour force. The proportion of the recent immigrant labour force with postsecondary education was 9 percentage points above that of the Canadian-born labour force (61.5% and 52.4%, respectively).
Assessment of Future Labour Market Imbalances by Occupation
The assessment of future labour market imbalances by occupation (and the identification of occupations that are expected to be in labour shortage or surplus over the next 10 years) is based on:
- The current balance between labour demand and supply;
- Projections of the number of new job seekers emerging from the school system and from immigration and of the number of job openings resulting from expansion demand and from retirements.
The table at the end of this section presents the main results of the projections of new job seekers and job openings. It should be noted that these projections provide quantitative indications about potential labour market pressures over the medium term.
In addition, occupations showing signs of pressures as a result of imbalances between projections of new job seekers and job openings may not be necessarily classified as being in an excess demand or excess supply situation. This is due to the fact that labour mobility is taken into account when determining the future labour market situation of an occupation. For example, certain occupations estimated to be currently in excess demand, such as Supervisors, Library, Correspondence and Related Information Clerks (1213) and Accommodation Service Managers (0632) are expected to return to a balanced situation despite the fact that projections of new job seekers do not exceed the projected number of job openings. The reason is vertical mobility, as workers in Clerical Occupations (major group 14) and Occupations in Travel and Accommodation (643) can move up the ranks, helping to alleviate excess demand pressures.
| The first column provides data on non-student employment by occupation in 2005. For each of the supply and demand components, the projected flows for the years 2006 to 2015 are added up. A qualitative indicator is then used to rank an occupation relative to the others for the same component. This second classification follows a distribution rule of 25%, 50% and 25%; in other words, 35 occupations are "above average" (AA), 70 occupations are "average" (A) and 35 occupations are "below average" (BA). |
| In the first column under "equilibrium", expected demand is compared to expected supply (and divided by 10 years) to arrive at an estimate of annual excess demand. The indicator is positive if demand exceeds supply and negative if supply exceeds demand. |
| The second last column shows the Normalized Future Labour Market Situation (NFLMS) indicator, a summary indicator that estimates the direction of future labour market conditions as follows: average annual supply (new job seekers) - average annual demand (job openings) / employment during the reference year |
| A positive NFLMS value indicates that the occupation is showing signs of labour shortage (excess demand), while a negative value indicates that the labour supply tends to exceed demand. |
| The last column shows the increase (or decrease, if negative) in the number of school leavers and immigrants needed to restore the balance between expected supply and demand. A value of 100% means that the supply of workers must double in order to reach a balance situation. A negative value indicates the percentage by which supply exceeds demand. |
Assessment of Future Labour Market Imbalances by Occupation
22See T. Sargent, "Canadian Labour Force Participation Rate: Developments and Porspects." Ottawa, Finance Canada, June 2003.
23Employment forecasts reflect employment demand rather than actual employment. Thus, if the supply does not meet the estimated demand, employment growth will be lower than forecast. (This applies to all industries, but is particularly relevant for the health sector, where supply is subject to government restrictions through medical and nursing school quotas.)
24The LAD was chosen primarily for its large representative sample of older workers and its longitudinal nature, two critical characteristics for developing an aggregate time series of retirement flows. In fact, the size of the LAD sample rivals the Census, unlike the Labour Force Survey and Survey of Labour and Income Dynamics (SLID).
25Because of the lags in releasing data by Statistics Canada, the model must first forecast the past before forecasting the future. For example, because community college data is only available up to 1999, a forecast for the period 2000-05 must be developed before one is derived for the reference period 2006-15. A review of selected provincial administrative data, which are available up to 2004, shows that our projections track the broad trends correctly.
26The National Graduate Survey was designed to determine, among other things, whether postsecondary graduates had been successful in obtaining employment since graduation, the relationship between the graduates' programs of study and the employment subsequently obtained and the transition from school to work of trade/vocational, college and university graduates. The respondents to this survey were contacted two and five years after their graduation. Information from the two latest surveys was used in our analysis — the 2002 NGS of 2000 graduates and the 1997 NGS of 1995 graduates.
27First-year enrolments are enrolments in the first year of a particular level of study. Since the SLM projects a flow of new labour into the market, it is necessary to analyse the flow of new students into various levels of schooling.
28In A Dynamic Analysis of the School-to-Work Transition of Post-Secondary Graduates in Canada (Human Resources Development Canada, R-99-14E, 1999), Ross Finnie found that broad field-of-study distributions did not change significantly over a 15-year horizon.
29Data on the proportion of individuals pursuing further education and on the labour force participation rate at the secondary level were drawn from Statistics Canada's Youth in Transition Survey (YITS) and Labour Force Survey (LFS). At the postsecondary level, participation rate data come from the NGS.
30In the SLM, people with some postsecondary education are treated as a distinct group due to the large size of that group, and their labour market characteristics differ from those with completed high school.
31The Models of Economic-Demographic System (MEDS) derives a population forecast until 2051 for Canada and the provinces by relying on the usual set of factors: birth rates, mortality rates, and migration flows.
32An alternate approach would be to use the information on an immigrant’s "intended" occupation from the immigration database. However, analysis has shown that the relationship between the "intended" occupation of immigrants before arrival and their "actual" occupation is not statistically significant when considering other occupation-related personal characteristics. This appears to imply that characteristics such as education and location are more important determinants of occupation than statements of intent at the time of landing. For more details, see David A. Green, "Intended and Actual Occupations of Immigrants," in Don J. DeVoretz, ed., Diminishing Returns: The Economics of Canada's Recent Immigration Policy. Policy Study 24 (1995).
33Based on the latest immigration data by age, obtained from Statistics Canada’s Annual Demographic Statistics 2005.
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