Ken Taylor does not mince words when it comes to the Vancouver Island labour market.
“It’s tough sledding here right now,” he says.
The owner of nine McDonald’s franchises sits in one of his three Saanich locations. It’s not far from Uptown, a sprawling shopping centre wedged between Highway 17 and the Trans-Canada Highway — twenty minutes away from anywhere and everywhere in the Greater Victoria area.
The breakfast rush is over, but it is always hard to tell in a place like McDonald’s, where the muffled murmurings of customers fuse with the shrieking beeps and blips of a fast-food production chain to create an oddly comforting soundscape.
“Our business continues to grow, and therefore we need more people,” he says. “In order to serve more customers, we need more staff. That is getting tougher and tougher in a tough labour market. It is a competition out there. Everybody is looking for the same staff, whether that is a Best Buy, a grocery store, a hardware store, whatever.”
Evidence of this competition appears everywhere these days. Signs advertising jobs litter the windows of shops. Job fairs like Nanaimo’s Black Press Extreme Education and Career Fair scheduled for June 21 continue to appear up and down the island. Earlier this month, McDonald’s went on what the company called a hiring blitz across western Canada to hire 400 new staff. Such mass hiring events used to be singular events, says Taylor.
“The last couple of years, we have been doing two or three [a year],” he says.
This demand for labour has been especially strong in tourism and hospitality-related industries. They currently employ 133,000 British Columbians, and represent a growing share of the provincial economy. Figures from the provincial government predict that those sectors of the economy will add 100,000 new jobs by 2020. Other sectors of the economy are growing as well, creating a demand for labour, without the corresponding supply.
“In general, B.C. has done quite well,” says Elisabeth Gugl, associate professor of economics at the University of Victoria. “We have had a lower unemployment rate than the rest of Canada,” she says.
As of June 2018, the provincial unemployment rate sits at 4.8 per cent, one full percentage point better than the national average. Victoria’s unemployment rate sits at 3.9 per cent, down from 4.2 in May 2018, but up from 3.3 per cent in November 2017.
According to the Canadian Federation of Independent Business (CFIB) latest Help Wanted Index, 407,000 private sector positions remained vacant during the first quarter of 2018.
“We are still seeing a high number of job vacancies, though the strong rise observed through 2017 has leveled off,” says Ted Mallett, vice president and chief economist at CFIB. “Small businesses are feeling the pressure of prolonged job vacancies, especially in British Columbia and Quebec, where the record high vacancy rates are still on the rise.”
This snap shot in time in turn points to a larger phenomenon that will continue to shape labour markets across Canada, including Vancouver Island, well beyond any fluctuations in the business cycle: demographics.
For the first time in the history of Canada as a modern state, the number of seniors exceeds the number of children.
Not surprisingly, the share of working-aged Canadians — those between the ages of 15 and 64 – has declined to 66.5 per cent from 68.5 per cent in the 2011 census, with the trend line pointing down, down, down.
Looking at 2016 census figures for Vancouver Island and the Coast, the region is among the oldest in the province, with 13.5 per cent of its population under the age of 14. The provincial share is 14.9 per cent, the national share is 16.6 per cent.
Such figures spell trouble for industries (like fast food or hospitality) that rely on young people entering the working force, but they are hardly the only ones struggling to fill jobs.
“We need more bodies,” said Catherine Holt, chief executive director of the Greater Victoria Chamber of Commerce. While the regional population has been growing — it hit 392,000 in 2017, up 1.2 per cent from 2016, according to provincial estimates — it has arguably been at the wrong end of the population pyramid. Victoria’s attractive lifestyle has drawn families to the region, said Holt. “But we also have more seniors,” she said.
Outside Greater Victoria, the population picture looks somewhere between mixed and bleak. While the regional districts of Nanaimo, Comox, and Cowichan Valley have seen their populations grow, the northern and central sections of Vancouver Island record stagnating or shrinking populations, leaving fewer people available for work.
Vancouver Island, of course, has a history of attracting labour from elsewhere, dating back to its colonial history. But the part of Island with the highest demand for labour is also one the most expensive places to live. The lack of affordable housing combined with affordable transportation and child care discourage working aged people to come to Victoria, Holt says.
“These things make it tough for a young family to choose Victoria,” she says.
New Democratic Premier John Horgan has announced a speculation tax, additions to the stock of student housing and measures to improve public transit as measures to improve affordability, but Holt reserves any verdict.
“These are all very good things,” she says. “It’s early days to know the full effect of anything that the government has announced.”
Another move is the ongoing minimum wage hike. It rose to $12.65 on June 1 from $11.35 and it is set to reach $15.20 on June 1, 2021.
But Holt says most employers in Greater Victoria believe that won’t solve their problems. It may also creates expectations that are difficult to meet.
The increase comes alongside the introduction of the new Employer Health Tax (EHT). It will replace Medical Service Premimums (MSPs). Holt calls the EHT “unfair” in noting that only employers are paying it. While MSPs represent a “regressive” form of taxation, the government should revise its plans, she says.
Labour economists have noted that Canada can increase the supply of labour by increasing immigration and tapping into groups that have remained historically under-represented, such as Aboriginal Canadians.
Governments can also increase labour participation among women by improving child care and making it easier for individuals to balance their family lives with their professional careers.
Others have pointed to the potential of automation, with some studies predicting that half of all current jobs will fall victim to machines and artificial intelligence. Others have challenged this argument by noting that automation has not created fewer but different jobs.
The education system and educators also play crucial roles in this equation. Skills in demand today might be irrelevant tomorrow and governments concerned about shortages in one or two sectors might suddenly find their educational investments to have been pointless.
Restaurateur Calen McNeil, whose holdings include the Big Wheel Burger chain, says he aims to pay his staff a “fair wage” that starts above minimum wage, and those who remain with his company for four years can expect to earn a “livable wage” of around $20 per hour.
“By that time, they [staff] are essentially in a management structure,” he says. “Not everybody aspires to flip burgers, but you can have a career with us.”
McNeil also tries to attract staff by offering a flexible schedule as part of larger package that adds value to the job.
“It’s a community mindset,” he says.
Taylor certainly does not see any obvious fixes on the horizon. He suggests that the key lies in treating workers for the scarce resource that they are.
“We are in a vibrant economy. You can’t wave a wand and make these things go away, because so many people want to move here, and there is such a boom on,” he says.
“It’s a question of trying to be better than your competition on a whole pile of fronts, and we try to be the best employer that we can be. We try to do things to keep our employees happy.