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A 21st Century Solution to a 21st Century Problem: Why Canada needs to invest in New Human Resource Development Strategies as part of the Economic Stimulus Package

Posted in Discussion Papers

by Mary Morrissey

Canada has done well in holding off recessionary pressures, particularly compared to our neighbour to the south.

However in November 2008 the crisis hit us hard.  Nearly 71,000 jobs were lost in that one month.  There is serious concern about further losses of high-paid manufacturing jobs in the auto sector and elsewhere.  The service sector has also taken a big hit – some 38,000 jobs.

Over 90% of the job losses were in Ontario, but other regions were impacted as well.  There were significant losses in forestry on both coasts and even the booming oil sands sector showed signs of retrenchment.  In December, the job losses topped 4,000 people in Nova Scotia alone.

The rapid onset of the recession seems to have taken everyone by surprise.  Prior to the recent setbacks, the major concern of labour market economists and policy makers was with labour and skills shortages driven by a falling birthrate and an aging labour force.

It is easy to be confused by this seeming reversal of circumstances, but two fundamental realities should be borne in mind:

  1. In the short-term (i.e., the next 12 to 18 months), Canada will undoubtedly see an increase in unemployment as workers are displaced from the sectors most vulnerable to recessionary impacts, most notably manufacturing (particularly companies that export to the US), construction, and private sector services.  Unemployed workers will seek to make transitions to different regions and industry sectors where jobs are available.
  1. In the longer-term (during and after recovery from the recession) the underlying problems of labour/skills shortages, and the need for workers to upgrade skills and to alter career paths, will reassert themselves.

Over the next few years, hundreds of thousands of Canadians will go through the personal trauma of job losses and the upheaval involved in transitioning to new employment opportunities.

Adults who face these situations must overcome a number of challenges in order to build the confidence and strength necessary to undertake major changes for themselves and their families, and to develop personal and work transition plans that will allow them to survive in an increasingly difficult economy.

What is currently being proposed?

An economic stimulus package of several billion dollars is proposed for the January 2009 Federal budget.  This package will likely provide stabilizing and restructuring assistance to some financial institutions and to manufacturing, forestry, mining and energy sectors as well as investment capacity for other levels of government for infrastructure and training.

As much as this emergency response is needed, there is a risk in rushing to respond to the immediate crisis as the single most important issue in the future of the economy.  In many ways the current economic and fiscal problem masks the longer term structural concern of demographics on labour force adjustment.

In addition, the traditional response of ‘more training’ tends to focus on creating and filling more seats in post-secondary institutions.  Pursuing these strategies alone without a more nuanced and comprehensive approach to adult learning is essentially offering a 20th century solution to a 21st century problem.

While it is crucially important to make further education and training accessible and available to adults in transition, we need to recognize that adults already possess considerable knowledge and skills.  By recognizing and building on existing assets, we can facilitate more effective transitions and more efficient solutions.

Many studies have pointed out that a significant amount of learning goes unrecognized in Canada. Eliminating the learning recognition gap would give Canadians an additional 4.1 to $5.9 billion in income annually (Conference Board of Canada 2001).  In addition, despite the fact that over four times as many young people go to university as in their parents’ generation, over 25% are working for minimum wage.  The longer term issues then include not only underemployment but the wasteful underutilization of skills and knowledge, as well as the ‘mismatch’ of people to jobs.

Many workers who will lose their jobs during the current recession will not return to the same workplaces to do the same work.  As the economy rebounds they will have to adjust to new work settings, many of which will demand higher skills levels to support productivity gains in a more competitive global marketplace.  Many people will change occupations.  All will need to bring knowledge and skills from previous jobs to their new environments.  For some, formal training will provide a bridge to new employment opportunities.  To make this cost-efficient and effective for individuals as well as in the long-term best interests of the economy, it will be necessary to develop thoughtful strategies that focus on the inclusion of greater numbers of adults not already in the workforce, and build on their strengths and assets.

Most industrialized countries have human resource development strategies in the form of national lifelong learning strategies and policies—including mechanisms for recognizing informal and experiential learning as well as formal learning for workplace / career advancement and institutional credit.  Although some provinces (most notably Manitoba and Quebec) show signs of developing positive models, Canada has no adult learning or lifelong learning strategy, and there is no pan-Canadian strategy for recognizing prior learning.

It has also become clear that old solutions such as relying solely on improved technology and increased immigration will be insufficient to meet the long term needs of the economy.

What is needed?

As pointed out in a recent study – Achieving Our Potential: An Action Plan for Prior Learning Assessment and Recognition (PLAR) in Canada (2008) – which was undertaken by the PLA Centre for the Canadian Council on Learning, foundational investment in PLAR and essential skills and literacy training is needed across the country, in order to assist the vast number of Canadians who are experiencing exclusion, dislocation, and under-utilization –or simply life transitions – to be able to make the necessary changes for themselves, their families, and their communities and to contribute to Canada’s immediate and long-term economic and social development.

Effective PLAR program mobilize and motivate adult learners, and they lead to greater efficiency in education and training through the rigourous identification of what the learners already know and can do.

PLAR programs are designed and carried out explicitly to help adult learners meet these challenges. The two most basic objectives of PLAR programs are:

  1. To build the confidence and motivation of adults as learners by identifying and valuing the significant learning they have typically accomplished outside of formal education and training settings, and;
  2. To bridge between the actual knowledge and skills of adults, much of it acquired through informal learning processes, and the requirements of formal educational and labour market systems and occupational and professional certification processes.

As the economy regains its momentum, employers will once again face the reality of labour shortages and the accelerating retirement of their most skilled and experienced workers.  As they were doing before the recession hit, they will look to a number of groups of under-employed people within the general population, and will also focus on immigration.  But again, all of these groups will need to make significant transitions before they are ready to function as highly skilled workers in demanding employment settings. PLAR will be an important component of these transitions.

In addition to displaced workers, whose numbers are growing daily, the following information describes the numbers of people who could become more fully available to the labour market if funding for the right policies and programs were in place.[1]

Target Population

Estimated Size

  1. Learners facing literacy/ essential skills challenges
  • 9 million people (42% of the adult population) –– below level 3 literacy skills
  • 2.7 million adults aged 25 to 64 with no high school and no further education/training
  1. Aboriginal adult learners
  • 154,000 (33%) of Aboriginal identity Canadians aged 25 to 54 have not completed high school or other education/training
  • 115,000 (24%) of Aboriginal identity Canadians aged 25 to 54 are not in the labour force
  • One in three Aboriginal persons aged 25 to 64 has not completed high school
  1. Immigrants – skilled and semi-skilled
  • 4.1 million persons between age of 25 and 64 born outside of Canada – 24% of total population
  • Of 700,000 “recent immigrants” (i.e., arrived between 2001 and 2006) 101,000  (15%) had high school as highest level of education, and 64,000 (9%) had less than high school
  • Immigrants account for about 21% of Canada’s labour force
  • The employment rate for 25 to 64 year old recent immigrants 67% compared to 82% for Canadian born peers.
  • 210,000 core working age recent immigrants were unemployed in 2006
  1. Persons with disabilities
  • 71,000 persons with disabilities, aged 25 to 54, were unemployed and 495,000 were not in labour force in 2001
  • Of 1.2 million persons with disabilities aged 25 to 54, 356,000 (30%) have less than high school, and 392,000 (25%) have high school only
  1. Women facing barriers re-entering the workforce
  • 1.3 million women between ages of 25 and 54 are not in the labour force
  • 700,000 women aged 25 to 54, are not in the labour force, and have no post-secondary qualifications
  • 1.8 million women aged 25 to 54 are in the labour force but have no post-secondary qualifications
  1. Apprentices and workers involved in professional certification
  • Approximately 60% of people who begin apprenticeship programs do not complete them to become full journeypersons
  1. Youth at risk
  • There are 888,000 people aged 15 to 24 in the labour force, without high school complete or any other formal education training

The importance of literacy must also not be overlooked in the rush to training.

The push to improve literacy levels in the workplace and to expand government investment in literacy programs is rooted in the growing realization that literacy is essential to a healthy economy.   When markets for capital, technology and knowledge are global, the literacy skills possessed by the average worker may determine which countries achieve the highest rates of economic growth.[2]

The evidence suggests that Canada’s continued economic success depends on our capacity to raise the average worker’s level of literacy and to reduce the proportion of adults with relatively low skills.  It also suggests that literacy and post-secondary education are complementary and that both yield the return on investment that drives much of government, business and individual decision-making.

The evidence also suggests that differences in average literacy levels between countries actually explain the majority (over 55%) of differences in long-term growth rates of GDP and labour productivity among our most serious economic competitors.[3]

Summary

Canada needs a human resource strategy to ensure that all Canadians are work-ready.  This requires extensive new investments in PLAR and essential skills and literacy development as a first-order solution to optimize training and skill development, and to facilitate labour mobility across industrial sectors and geographical regions.

The good news is that there is no need to build a new system for the delivery of such programs, since a third-sector community-based learning system already exists through the various agencies and networks serving the target groups who most need learning and in-transition support.

As recommended by the Achieving Our Potential report, Canada would be wise to recognize voluntary sector organizations as “learning organizations” which should be appropriately funded as primary delivery agents of literacy, essential skills and PLAR foundational programs.   The report also suggests that strategies for youth-at-risk, Aboriginal Canadians, older workers, and new Canadians should be developed and implemented.   The report further suggests utilizing tax credits, the Employment Insurance system, and other funding mechanisms to reduce costs barriers for adult learners and to provide strong incentives for organizations and employers to invest in education and training.

The current financial crisis is alarming.  However there are strong indications that the governments in Canada will attempt to shorten the recession and to soften its impact through a major program of stimulus spending.  It is essential that the stimulus program include targeted human resources development initiatives such as PLAR and essential skills and literacy training if we are to meet the challenges of long term labour force adjustment as well as immediate institutional and market concerns.

[Mary Morrissey was Principal Author of the Achieving Our Potential Report, which draws heavily upon the research and writing of the core project team which included Douglas Myers, Joy Van Kleef and Rick Williams] WilliamWilliamsswriting on the work on the core


[1] This information is drawn from the 2006 Canada Census and from other surveys of adult learners, Sources are cited in the socio-economic analysis chapter of the PLA Centre’s PLAR Framework Report.

[2] Coulombe, Serge and Jean-Fransois Tremblay. “Public Investment in Skills: Are Canadian Governments Doing Enough,” The Education Papers (Toronto: C.D. Howe Institute, October 2005).

[3] Coulombe, S., J.F. Trenblay, and S. Marchand. Literacy Scores, Human Capital and Growth across Fourteen OECD Countries (Ottawa: Statistics Canada and HRSDC, 2004).