Small and medium-sized enterprises (SMEs) in some of Canada’s fastest-growing cities are grappling with persistent skills shortages, according to recent research by The Conference Board of Canada.
The study, which focused on five cities that experienced significant immigration-driven population growth between 2016 and 2021, sheds light on the employment challenges faced by SMEs and the critical role of immigration in addressing these shortages. The five cities in the study are: Abbotsford-Mission B.C.; Halifax; Moncton; Oshawa, Ont.; and Saskatoon.
The research, which included insights from SME owners and senior leaders across nine sectors, found that while Canada relies heavily on immigration to fill gaps in the labour market, many newcomers face substantial barriers to employment.
“To effectively unlock the full potential of the immigrant talent pool and address these shortages, SMEs must proactively work to dismantle these barriers,” said Stefan Fournier, Executive Director of The Conference Board of Canada.
Lack of skill, not applicants
One of the key findings of the report is that the shortage of skilled workers is not a result of a lack of applicants but rather a lack of candidates with the necessary skills.
Language proficiency in English and French is particularly prioritized by SMEs, yet many immigrants struggle to meet these requirements due to limited access to language classes. This issue is compounded by the fact that SMEs often overlook language skills as something that can be developed on the job.
Negative experiences with immigration programs
The study also highlighted that the complexity of Canada’s immigration system further deters SMEs from turning to immigration as a solution to their labour needs. Negative experiences with immigration programs, including unclear processes and outcomes, have left many business owners hesitant to navigate the system.
The Conference Board of Canada suggests that collaboration between SMEs and organizations that serve them could improve access to information and help businesses more effectively manage immigration-related challenges.
“Challenges around sourcing staff continue to occupy the minds of business owners in Canada,” said Pouya Zangeneh, Senior Vice President of Small Business at Scotiabank. “New Canadians, with their diverse skills and experience, provide a valuable pool of talent that can play a critical role in alleviating the skilled worker shortage that Canadian small businesses often face.”
Despite efforts to adopt inclusive hiring practices, the report found that SMEs often lack comprehensive strategies for recruitment and onboarding that are inclusive of immigrant workers. Engaging with immigrant-serving organizations could help SMEs improve their ability to attract, retain, and integrate immigrant talent into local labour markets.
Affordable housing, transit, childcare
Beyond skills and immigration, the report identifies additional challenges such as affordable housing, public transit, and accessible childcare, which further complicate the labour market for SMEs.
While businesses may not be able to directly address these infrastructure issues, the study suggests that adapting workplace policies to better accommodate these needs could help alleviate some of the pressure on SMEs.
