What businesses want from the Ontario budget

Businesses in Ontario hope Thursday's budget from Premier Doug Ford's government will offer some solutions to the labour force crunch they're facing.

Statistics Canada released its latest job vacancy figures Tuesday, showing 323,000 unfilled jobs in the province.

In advance of each budget, organizations that represent businesses submit their annual laundry lists of requests to the provincial government. What makes this year's requests different from the usual is the level of concern over finding workers.

The Ontario Chamber of Commerce says 87 per cent of large businesses in the province face labour shortages.

"There are very significant gaps that need to be addressed," said Claudia Dessanti, the chamber's senior director of policy.

About seven per cent of all jobs in the food services and accommodations sectors are unfilled, according to Statistics Canada data. The chamber of commerce says there are also "significant labour shortages" in the transportation, construction, child care, tourism, retail and health care sectors.

Dennis Darby, chief executive of Canadian Manufacturers and Exporters (CME), an industry lobby group, says the companies he represents are finding it hard to recruit workers.

"What we hear from manufacturers is finding people with the skills they need is their number one concern," said Darby in an interview.

On Tuesday, Ford revealed one of his government's budget plans for addressing the labour crunch: extra funding to build, upgrade and operate skilled trades training centres, which are typically run by unions, businesses and industry associations.

Asked what his government will do immediately to deal with worker shortages, Ford pointed to immigration.

"We've been on the federal government non-stop from the day we took office to bring more people in faster, cut through the red tape, get people their work permits, that they can come and start training and lay down their roots," said Ford during a news conference in Vaughan.

Labour Minister Monte McNaughton referenced the recent deal with Ottawa giving Ontario the power to select up to 18,000 immigrants per year to fill specific labour shortages, predominantly in health care and skilled trades.

McNaughton added the government also aims to boost the size of Ontario's labour pool by helping people move from social assistance to the workforce.

During the government's pre-budget consultations in January and February, a range of corporate lobby groups called for tackling the workforce issue:

• Food, Health and Consumer Products of Canada

Addressing "chronic labour shortages" is the number one budget recommendation from the organization that represents food processing companies and other household product manufacturers.

"Looking abroad to fill the domestic gap is crucial," says its pre-budget submission. It asks the Ford government to work with the federal government to "streamline the Temporary Foreign Workers Program and increase economic immigration."

• Automotive Industries Association of Canada (representing vehicle parts and repair companies)

"To address the industry's skill shortage, upskilling and new skills training systems must be strengthened to meet the needs of employers," said Alana Baker, senior director of government relations for AIA Canada.

"We are asking the government to ensure that more funding is made available to employers to access third-party training for their workers," Baker told the Legislature's finance committee during its pre-budget consultations.

• Tourism Industry Association of Ontario

Tourism businesses are struggling with recruitment and retention as workers move to other industries, said Jessica Ng, the group's director of policy and government affairs.

Speaking to a pre-budget finance committee hearing, Ng called for "targeted support measures to create the sustainable workforce that our visitor economy desperately needs."

• Canadian Federation of Independent Business

"Labour shortages are impacting small businesses' competitiveness," said CFIB in its pre-budget submission to the government. "A tight labour market continues to drive upward pressure on wages and labour costs."

CFIB's chief recommendation to deal with that: reduce the small-business income tax rate, currently at 3.2 per cent.

Labour shortage a new thing for Ontario

It's highly unusual for a shortage of workers to be among the most pressing issues confronting the provincial government at budget time, says Brian Lewis, who recently retired as chief economist in the Ontario Public Service.

"I've never talked about labour shortages as an economist my entire career," said Lewis, now a senior fellow and lecturer at the Munk School for Global Affairs and Public Policy.

Aside from the workforce crunch facing business, Lewis says the government has some decisions to make about labour in the health-care sector, which accounts for the biggest portion of Ontario's budget.

"If you want more people to work in health care, I think paying them more is going to be important," said Lewis. "It's hard for me to imagine a solution to this without doing something on the compensation side."

Wage increases for pubic sector workers in Ontario have been held to no more than one per cent annually under the terms of Bill 124, what the Ford government called the Protecting a Sustainable Public Sector for Future Generations Act.

"The world has changed since the bill was introduced," said Lewis. "I think there's an opportunity here for the government to take a step back and say, 'We need to have a fresh approach.'"