Major changes needed for prosperous future: Report

HRPA, Deloitte present 3 scenarios for Canada in 2025
||Last Updated: 04/05/2012

Without some major new strategies and changes to policy, Canada could find itself in a dire situation come 2025, according to a study by the Human Resources Professionals Association (HRPA) and Deloitte.

In looking at the future of the Canadian economy and society, the study examined four fundamental drivers of change: demographic shifts, economic prosperity, technological adoption and sustainability. Three alternative future scenarios were then developed and discussed with 50 CEOs and chairs, ex-ministers, assistant deputy ministers, academics and economists.

“The goal of this exercise was not to lay out the definitive future of the Canadian workplace. Rather, it recognizes that, despite our relatively enviable position, we must identify strategies that address the very real problems that continue to exist: the sustainability of our industries, the competitiveness of our firms, the quality of our employment, the inclusivity of our workplaces and our level of innovation.”

The first two scenarios, “lost decade” and “unsustainable prosperity,” are darker but realistic, said the report, while the third, “northern tiger,” has a brighter outlook but is the result of a series of recommended strategies.

In the lost decade scenario, Canada is dragged down by a slow global recovery. There is no industrial diversity and a heavy reliance on exporting raw materials. Structural unemployment and skill imbalance force employers to outsource processes affected by the talent shortage.

Immigration slows in 2025 as the Canadian brand loses its lustre and many strong performers leave the country to find new opportunities abroad. And disengagement, risk aversion and slow adoption of technology mean Canada is burdened with a mismatch of supply and demand and unhappy workers improperly equipped to produce the necessary productivity gains.

“Overall, the lost decade is a worst case scenario — but, unfortunately, not an implausible one,” said the study, The Lost Decade, Unsustainable Prosperity or the Northern Tiger? CanadaWorks 2025.

In the second scenario, unsustainable prosperity, the economy is strong and steady increases in the price of oil lead to gains in the gross domestic product (GDP). But there is a lack of growth in new tradable sectors and the development of a “have and have-not” society.

Knowledge-class employees and high-skill trades are in demand while transactional-class workers are left behind, leading to tensions and low productivity. And immigration challenges such as credential recognition remain unsolved, said the study.

“Unsustainable prosperity demonstrates a failure of both leadership and imagination.”

But in implementing a variety of strategic recommendations, Canada can put into place a sustainable foundation for prosperity.

“By the year 2025, Canada will have earned its global reputation for excellence — not just in providing resources but for adding value to our exports, our people, our society an the world,” said the study.

The strategies for future success include:

Modernize education:
•Improve access to technology and teaching tools in the classroom.
•Improve financial literacy.
•Encourage math, engineering and computer science as studies.
•Match course offerings to employment market demand.
•Invest in teacher performance improvement.

Reform immigration:
•Improve the speed and volume of accreditation for qualified immigrants.
•Foster accreditation programs at foreign universities.
•Build online systems so registration, credential recognition, education upgrades and language programs can be done in the home country.
•Better match immigration skill supply with regional employment market demand.
•Increase the flow of high-skilled immigrants.

Improve employment flexibility:
•Build more flexible employment contracts by encouraging tradeoffs between employees and employers and removing constraints from employment standards acts.
•Make adjustments for aging workforce, such as flex time, wellness programs or pension incentives.
•Encourage labour-management partnerships that foster innovative solutions.

Invest in industry excellence:
•Build awareness campaigns for championed industries.
•Improve sectoral productivity.
•Invest selectively and strategically in areas of strength, such as high-value manufacturing or green industries.

Infrastructure for access to talent:
•Replace crumbling infrastructure with a focus on high-speed trains and transit to reduce congestion and allow for greater access to diverse skills.
•Encourage cheaper transport infrastructure for air travel to encourage inter-provincial mobility.
•Build wires and wireless infrastructures to support future technologies.
•Build suburban infrastructure to promote distributed work.

In the northern tiger scenario in 2025, the economy is strong and robust, “protected by industrial diversity and powered by both resources and trade with non-traditional partners,” said the study.

New tradable sectors are created in sectors such as high-value manufacturing and green technology while immigrants are well-integrated into the economy and fueling growth. Employment standard acts have been updated to allow greater flexibility for employees and employers.

Productivity is maximized, in this best-case scenario, through educational choices that match market demand, aggressive technology adoption and progressive management styles.

“If we are to become the northern tiger, we need to take action now — 2025 is sooner than we think,” said the study. “We can, and we must, invent a prosperous future for Canada.”

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