Recap of Outlook 2020 and Trends Shaping BC’s Labour Market

1. 1 Recap of Outlook 2020 and Trends Shaping BC’s Labour Market presented to: TECC-ASTTBC June 25, 2010 Vancouver, BC Ken Peacock

2. 2 Outlook 2020 Project • Ambitious project examining BC’s economy in the post Olympic decade • 28 topic papers • 15 dialogue sessions • 4 half-day conferences • staff research • Question: how to best position BC for success in the next decade • intended to bring forward ideas and policy directions for positive, realistic agenda • still a work in progress; views of the Business Council not yet finalized

3. 3 Basic Messages • Vision for BC • increasingly innovative and knowledge driven • rich resource base critical part of our success • Gateway for trade and commerce between North America and Asia • Hallmarks for our economy in 2020 • open and connected • successful exporter of goods and services • innovation-led • smart energy and environmental practices

4. 4 Trends Shaping the Economic Landscape • In many ways BC will be similar a decade from now (US, immigration, services) • But change will also come from • globalization (more companies involved in trade) • rise of emerging markets • growing importance of science, technology & innovation (exports) • demographics (older and more diverse) • environment and energy (BC will be part way down path to low-carbon economy) • urbanization • human capital and knowledge (higher skill intensity of work)

5. 5 Exports Turn Up in Q1 2010 BC International Merchandise Exports billions $ millions $ Latest: March 2010 Source: BC Stats.

6. 6 Global Economic Production Shifts to Emerging Markets (% of world output) • The Great Recession is expected to accelerate the shift of global economic influence to China and other emerging markets. Source: IMF. National output measured using PPP exchange rates.

7. 7 Structure and Strategic Directions • BC Economic Structure (high level) • small, open, trade-dependent • resources still important • services = a big share of economic activity and a growing source of exports • Strategic directions to 2020 • human capital – top priority • productivity agenda • unleashing the north’s potential • innovation and commercialization • expanding tradable services

8. 8 Feeble Productivity Gains for BC per cent Source: Statistics Canada.

9. 9 Fewer Younger People… thousands projection Source: BC Stats.

10. 10 No Increase in “Middle Age” Population thousands projection Source: BC Stats.

11. 11 50 to 64 Cohort Still Expanding thousands projection Source: BC Stats.

12. 12 Labour Force Growth Will Slow thousands projection Source: BC Stats and Business Council of BC for projections.

13. 13 Labour Force and Employment Projections thousands projection Source: BC Stats and Central1 and Business Council of BC for projections.

14. 14 Recent Provincial Projections thousands Source: British Columbia Labour Market Outlook 2009-2019.

15. 15 Recent Provincial Projections thousands Source: British Columbia Labour Market Outlook 2009-2019.

16. 16 Thoughts on Skill Shortages • Widespread and sustained skill shortages not likely • markets adjust • wages, participation rates, immigration change • companies invest in more capital • 1970s to mid 1990s were the aberration – period of labour abundance • baby boomers and women entering the workforce • Industry specific skill shortages will emerge • takes time for labour markets to adjust • higher skill occupations will likely face more significant shortages (regional shortages also an issue) • Higher paying industries should be able to attract workers • critical issues are the quality of workers and capacity to train people

17. Regional Projections 61,930 supply less demand -3,260 1,540 -720 -1,210 -2,390 -1,230 Source: British Columbia Labour Market Outlook 2009-2019.

18. 18 Supply / Demand Balance by Select Occupations, BC Source: British Columbia Labour Market Outlook 2009-2019.

19. 19 BC’s Future Success • No room for complacency • Role for government – establish attractive hosting conditions • human capital • infrastructure • public institutions • business climate • Importance of human capital cited in many of the papers • shortage of key technology workers and senior technology talent management a constraint on growth

20. 20 BC’s Future Success • Investing in human capital is increasingly important as knowledge, skills and creativity play a lager role • Gaps in talent development • educational attainment of First Nations (Dan Perrin) especially relevant to resource industries • early childhood education (Clyde Hertzman) • estimated 20-25% of youth population fails to get adequate skills to become productive adults • addressing early childhood development requires significant resources

21. 21 BC’s Future Success • Immigration requires more attention • occupational bodies should simplify certification process and devise transition programs for immigrants with appropriate credentials and language skills • expand the PNP program • explore the potential to encourage new comers to settle in areas outside of the lower mainland • Economic conditions in California could help BC attract talent

22. 22 Issues for Government Policy • Allocation of tax dollars across public post secondary institutions and programs • proliferation of universities • capacity for technical and other career training • another BCIT – Alberta example? • Immigration (temporary and permanent) • Under represented groups • Retraining of displaced and older workers • Tax incentives • Childcare • Escalating health care costs could crowd out other important investments

23. 23 BC’s Medium Term Outlook: Positive Factors • Asia’s growing economic clout • BC well positioned – gateway • “Great Recession” has accelerated Asia’s rise • Higher commodity prices provide a lift • More competitive tax regime • Significant investments in infrastructure • airports, ports, highways, energy • Attractive destination for immigrants • driver of population growth • Skilled and increasingly well educated workforce • Recovery in US is coming (housing/lumber markets poised to rise)

24. 24 Conclusions • BC Labour force growth will slow, but not dramatically • modest changes in participation rates and immigration have meaningful impacts • there are enough people – issue is training/skills and urban pull • Industry specific shortages will translate into higher wages • Workers will shift to industries paying higher wages • Economic recovery + demographics = labour market tightening