The Future of the Canadian Industry Forecasts of Labour Markets for Selected Industrial Aggregates

Abstract

This paper aims to provide forecasts of labour supply and labour demand until 2035 for Canada and the provinces and for 29 industrial aggregates as defined by the North­ American Industry Classification System (NAICS). To conduct our projections, we use a simple trend-based forecasting approach, developed by the Boston Consulting Group (BCG), holding other variables constant. Then, we compare our results to various projections conducted by governments and consulting groups. We find that discrepancies between our results and those of other publications using the same methodology come down to differences in the datasets used. We also find that the provinces can be classified into three categories with increasingly deeper expected labour shortages: sparsely populated provinces, densely populated provinces and oil-rich provinces. Compared to other publications, our results do not always line up if other publication include more recent years a 2013, the last year of data used in this paper. At the industry level, we find that tightly regulated industries or industries with higher entry costs yield more consistent long-term labour market forecasts regardless of the assumptions used when compared to highly competitive industries. We conclude by noting that in small samples, our methodology fails to distinguish between actual trends and noise in the data. As a result, trend-based methodologies are probably more appropriate for very high level and general analyses.