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Canada: For richer, for poorer? Government’s role in preserving standard of living

Learn about delivering public service for the future by creating high performing labour markets in Canada.

Overview

Accenture’s latest Delivering Public Service for the Future research focuses on the role of labour markets in assuring national well-being. For this research, we analyzed the implications of demographic changes in 162 countries. We surveyed jobseekers, employers and public employment service officials in Canada as well as 10 other countries. And we focused on this burning platform: If governments do not respond with urgency and decisiveness to address the fundamental challenges in their labour markets, they will see a decline in productivity growth and a shrinking workforce. That, in turn, may result in a decline in overall standard of living in the future.

In analyzing Canada’s labour market, Accenture has identified three factors threatening the fundamental assumption that future generations will be better off than their parents: profound demographic changes resulting in fewer people available to work, as well as stagnant participation and productivity growth rates leading to lower personal income and a less prosperous society. If participation rates and productivity growth do not increase, Accenture predicts that standard of living in Canada will decline 12 percent by 2030.

By aligning to the four fundamental shifts necessary to deliver public service for the future, Canadian public officials can help create a jobs and skills environment that is more transparent and connected—and that offers greater flexibility and accessibility. In doing so, they can play a pivotal role in achieving a world-class labour market that preserves the standard of living.

Background

Accenture analyzed trends related to demography (the share of working-age population in the total population), workforce participation rates (the share of working-age people who are employed) and productivity (workers’ contribution to a country’s gross domestic product, or GDP) in 162 countries. Together, these factors add up to GDP per capita, used as the measure of standard of living.

Although Accenture’s standard of living model provides participation and productivity outcomes required to counter the impact of projected demographic headwinds, it does not offer insight into the most effective way of achieving these outcomes. To obtain a 360-degree view on the jobs and skills environment, Accenture conducted four surveys—the Accenture Citizen Survey, the Accenture Job Seekers Survey, the Accenture Employers Survey and the Accenture Public Employment Services Officials Survey.

A majority (53 percent) of Canadian citizens surveyed are not confident in government’s ability to effectively tackle jobs and skills issues. Nearly half (49 percent) of Canadian employers surveyed do no use any government-provided employment services—the second-highest figure of non-usage after the UK (52 percent) across all countries surveyed. Nearly one-third (31 percent) of Canadian jobseekers surveyed have not obtained job search advice from public employment services, and only 19 percent consider public employment services to be the best source of information on job opportunities. Finally, Canadian public employment service officials regard the lack of engagement with educational institutions (44 percent) and businesses (43 percent) as a key challenge.

Analysis

Accenture’s latest Delivering Public Service for the Future research points to a number of factors affecting labour markets and threatening standard of living in Canada:

  • Geographic dislocation of jobs. Economic productivity and employment opportunities vary widely across Canada. Yet Canadian jobseekers are not prepared to move, with only about 19 percent indicating willingness to relocate to another province for work.

  • Barriers to entry. Canada’s young workers are challenged by a lack of training and experience, while the country’s Aboriginal and immigrant populations face lower-than-average rates of employment.

  • Mismatch between skills and jobs. Although Canada is a top performer in education, the economy still lacks some of the competencies needed for the future—particularly science, technology, engineering and mathematics (STEM) skills.

  • Volatile business environments. With flexible labour regulations, Canada initially emerged from the global financial crisis in relatively good shape. But now employers are holding back on recruiting due to uncertainty about growth prospects.

Though only one of many stakeholders in any labour market, Canada’s provincial, regional and federal government agencies have an opportunity to play a pivotal role in orchestrating the jobs and skills environment, and supporting a world-class labour market.

Recommendations

Accenture believes that a new, comprehensive approach is needed to address threats to standard of living and deliver a world-class jobs and skills environment—one that requires a transformation not only of public employment services, but also of education and skills providers, jobseekers and employers.

To deliver public service for the future, Accenture believes high-performing labour markets must be:

  • Visible and Insight Driven. High-performing governments use Labour Market Intelligence and analytics—gathered and shared among all stakeholders—to support better outcomes and help shift labour markets from reactive to insight driven.

  • Connected and Collaborative. A connected labour market requires open sharing of information and strategies across a complex jobs and skills environment—along with greater engagement among public service officials, employers and educational institutions.

  • Flexible and Accessible. High-performing labour markets can be defined as those with responsive regulatory environments that allow employers to be flexible and adapt to the inherently dynamic nature of business. Supporting the shift from a public management to public entrepreneurship mindset, the national government can create incentives that encourage provincial agencies to match jobseekers with vacancies outside their own region.