A labour shortage occurs when the demand for labour exceeds the supply of labour, right? Well, apparently not in Alberta.
The Alberta Federation of Labour took a long, hard look at the Government of Alberta's projections showing an astronomical labour shortage of 114,000 workers by 2021 and found them to be based on misleading methods.
Instead of a straightforward calculation of demand for labour minus supply of labour, with a shortage occurring when total demand exceeds total supply, Alberta used a strange formula that subtracts the annual change in demand from the annual change in supply.
The result: even though the Alberta government's projections show the supply of labour exceeding demand (a labour surplus, one would think) for every year through 2021, their strange method shows a labour shortage.
What's more, the government accumulated these phoney yearly labour shortages up to 2021 to show a "cumulative shortage" of 114,000 workers even though this supposed shortfall would be captured in the following year's demand. Put another way: one vacant job over 10 years is still one vacant job, not 10 as the Alberta government would have us believe.
The same day the AFL released its report, the Certified General Accountants Association of Canada released its own report with similar findings. Their findings include "Labour shortages are difficult to observe and measure directly" and "Where sufficient data exists, an assessment shows that labour shortages occurred rather sporadically and did not persist for more than one year at a time over the past ten years."
These bad numbers lead to bad public-policy decisions.
On July 16, Citizenship, Immigration and Multiculturalism Minister Jason Kenney used Alberta's "acute labour shortages" to justify an expansion of a Temporary Foreign Worker pilot program whereby employers won't have to consider hiring Canadians in certain occupations first before turning to offshore labour.
Originally, the pilot program allowed some Alberta employers to bring in Temporary Foreign Workers for steamfitter/pipefitter jobs without going through the Labour Market Opinion (LMO) process. The LMO process forces employers to show efforts to "recruit and/or train willing and available Canadian citizens/permanent residents." The expanded pilot process to include six more occupations, including welders, heavy duty equipment mechanics, ironworkers, millwrights and industrial mechanics, carpenters, and estimators.
Of course, the AFL acknowledges that there is a "tight labour market situations in select trades and skills" in the province, but those specific shortages in certain occupations are related to the provincial government's ineptitude for planning and pacing development in the oil sands.
Nevertheless, that fact hasn't stopped anti-union interests in the province from using the government's faulty labour shortage figures to call for radical changes to labour markets with the end goal of depressing wages in the oil sands.
This article was a guest post by the Alberta Federation of Labour's Tony Clark. It was first posted on the Progressive Economics Forum.