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In a hurry: wage increases on the way amid acute labor shortages

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Difficult to match current unemployed workers with available jobs

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Good Morning!

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Canada’s “mismatch” between labor supply and demand is hitting the sectors hardest hit by the pandemic particularly hard, a phenomenon that TD Bank Group experts say is likely to drive wage growth in those sectors.

Although the national unemployment rate remains well above its pre-pandemic level (currently at 6.9%, down from 5.6% before the crisis), demand for workers from Canadian employers has increased faster than your ability to hire them, leading to a vacancy rate of 4.8% in July, when the most recent data was available from Statistics Canada.

That number of job openings is significant, TD economists Sri Thanabalasingam, Uthman Adepoju and James Marple wrote in a note Wednesday. “Based on the relationship between job vacancies and unemployment that existed before the pandemic, the job vacancy rate in July would be consistent with an unemployment rate of about half what it is today.”

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It has become more difficult to match current unemployed workers with available jobs, the authors wrote, due to factors including health concerns, childcare reliability, occupational change, particularly among workers in sectors affected by the pandemic, and an increase in the long term. term unemployed.

Wage growth has remained “relatively moderate” even as concerns about labor shortages have reached a fever pitch, but “f In the face of staff shortages, companies may be left with few another option, but to increase the salary to attract new workers ”, they said.

“The reallocating nature of this economic shock is already evident in stubbornly high long-term unemployment that will make it more difficult to fill positions in recovering industries,” according to TD economists. “This development, combined with a strong cyclical recovery in the labor market, is likely to increase workers’ bargaining power and put upward pressure on wages in the next quarter.”

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The food and lodging services sector is making a “huge contribution” to market imbalances, TD economists wrote. This is followed by the business, construction and other support sector and the financial and insurance industry, which has seen significant growth in labor demand thanks to the real estate and financial market activity in the pandemic, but may be suffering from a shortage. available workers with skill set rights.

Thirteen of the 18 sectors that Statistics Canada measures, accounting for 75 percent of total employment in Canada, had a gap between labor supply and demand of only about one percentage point, the TD economists wrote.

Despite this, 10 sectors saw labor demand grow faster than supply between May and July this year, amid provincial economic reopening.

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Unemployed workers, particularly long-term unemployed, filling available positions could alleviate labor shortages in the short term, the authors wrote, but career changes, deteriorating skills, or mismatch with demands The market share could prolong the tight labor market, adding to wage growth pressures. .

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LARGE BLADES: The declining costs of solar power often make news headlines, but wind turbines in North America are poised for huge growth, too.

In recent months, Connor Teskey, CEO of Toronto-based Brookfield Renewable Partners LP, has touted “repowering” plans – essentially upgrading existing wind farms, often installing new larger blades and rotors, and sometimes new software. Reports by Gabriel Friedman.

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Just when Canada needed more investment in housing, investment in residential construction fell 2.9% in August, with decreases recorded in all provinces except for a slight increase in Nova Scotia.

Investment in single-family homes fell 2.6 percent to $ 7 billion, with Quebec, Ontario and British Columbia, the three most populous provinces, seeing the biggest drops. Despite a fourth consecutive monthly decline, single-unit construction was 25.6 percent higher than the previous year, according to Statistics of Canada.

Investment in multi-unit construction fell in all provinces, 3.3% nationally to $ 6.0 billion in August.

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The province of British Columbia alone is estimated to create nearly 40,000 new accounting jobs by 2029, in an expansion of an industry that presents many opportunities for those looking to work in finance.

Clearly, there are opportunities for those looking to establish a career in finance, and completing training that can give you an edge can mean a long and rewarding career, according to our content partner StackCommerce.

A great place to start is with the ultimate financial accounting and CPA certification training package.

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Today’s posthaste was written by Kelsey Rolfe (@kelseyarolfe) and compiled by Yadullah Hussain with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.

Have a story idea, proposal, embargoed report, or suggestion for this newsletter? Email us at [email protected], or hit reply to send us a note.

Listen to Down to Business for in-depth discussions and information on the latest in Canadian business, available wherever you get your podcasts. Check out the latest episode below!

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