Canada’s Skills and Labour Market Gaps / Canada’s skills and labour market gaps Significant skills and labour shortages threaten Canada’s prosperity In critical areas of our economy, including health care, early childhood education, and non-regulated mid-skill professions, we do not have enough people equipped with the skills and training needed to meet growing demand. Using Statistics Canada data from 2023, the Business Data Lab at the Canadian Chamber of Commerce reported that 68 per cent of employers felt that their workforce was not “fully proficient in terms of skills needed to do their current job.” Meanwhile, 69 per cent of SMEs in a Canadian Federation of Independent Businesses survey said that their main recruitment obstacle is a shortage of qualified candidates. As roles go unfilled and inefficiencies mount, these gaps are contributing to our broader national productivity challenge. Skills gaps exist across industries and education levels, but there is a particularly notable gap in technical and vocational professions: two-thirds of Canadian job vacancies that require post-secondary training require non-university credentials, such as college and trade certifications. In particular, there are gaps for “jobs that require specialized skills but do not require extensive investment in terms of training time or resources,” and technical skills. A 2021 Statistics Canada survey found that technical, practical and job-specific skills were the areas with the largest gaps. Personal Support Workers Are In High Demand Canada is facing, and is expected to continue to face, significant labour shortages for Personal Support Workers (PSWs) in coming years, particularly as Canada’s population ages and more people require the support of PSWs. Research from McMaster University found that the home care sector will require an additional 39,000 PSWs by 2043 (for a total of 115,000) while the hospital sector will require an additional 100,000 (for a total of 200,000). The Government of Canada recognizes how critical it is to attract and retain PSWs: Budget 2025 introduced a temporary Personal Support Workers Tax Credit under which workers can claim a tax credit equal to five per cent of their wage. PSWs are a key example of the crisis caused by the technical and vocational skills gap in Canada: skills shortages are costly to governments and lead directly to negative outcomes for Canadians, including lower standards of care, having to pay more out of pocket for care, and requiring family members to assume the burden of providing care to loved ones. This skills gap is likely to intensify further — Canada heavily relies on newcomers to fill the roles as PSWs: approximately 35 per cent of PSWs in Canada are immigrants. With reduced immigration and lower numbers of international students entering the country, employers we interviewed are concerned about filling vacancies for PSWs. The current state of Canada’s labour gaps As of July 2025, there were nearly 93,000 job vacancies in health care and social assistance and 16,000 in educational services across Canada. There is an estimated cyber workforce shortage of 25,000, which is expected to grow to 100,000 by 2035. 93,000 Job Vacancies in Health Care 16,000 Job Vacancies in Educational Services 25,000 Cyber Workforce Shortage It is clear that skilled immigrants are needed to help fill Canada’s labour gaps: Canada relies on newcomers for the majority of our labour force growth, as a result of low birth rates and an aging population. Canada’s total fertility rate has declined for the last 15 years, reaching a low of just 1.25 children per woman in 2024, while people over 55 accounted for nearly 22 per cent of the workforce in the same year (compared to just 12.6 per cent in 2000). As the Government of Canada aims to reduce immigration, it is increasing the share of economic migrants to 64 per cent of all immigrants, recognizing the need for immigration to fill labour market gaps. But Canada doesn’t just need international talent — it needs international talent with the right skillsets and credentials. Too often, however, it is difficult for employers to hire international talent. Through interviews with employers, industry partners, and immigrant service providers, we heard repeatedly that employers are facing labour shortages and are seeking talent from abroad to help fill gaps. Some employers struggle to hire international talent because they are unfamiliar with economic immigration pathways and how to access candidates, feel unprepared to offer training or support that immigrants may need, lack confidence in assessing or evaluating non-Canadian credentials or experience, and may face long processing times. CASE STUDY PSW recruitment in Kenya Some employers are both so confident in international talent and in need of staff that they take costly and significant steps to recruit internationally. In 2023, Tri-County Mennonite Homes, a large employer of PSWs in Ontario, traveled on a mission to Kenya with Talent Beyond Boundaries, 369 Global, and others, to recruit health care professionals living in a refugee camp. Several refugees were hired and permitted to immigrate through Canada’s Economic Mobility Pathways Pilot. Despite the complexity of the project, Tri-County Mennonite Homes participated because they are growing rapidly and cannot recruit enough talent in Canada alone. This example demonstrates the degree of demand for skilled international talent that is readily available outside of Canada. Employers are also looking for soft skills and Canadian training and experience We also heard from employers that labour market gaps are not exclusively related to technical skills. Industry and immigrant service providers noted that while many employers are open to hiring candidates with international experience and credentials, challenges often arise not from technical skills but from gaps in language and soft skills required for the role. Similarly, many of the people we spoke with identified other, non-skills barriers to employment that hurt newcomers and employers alike. System barriers These can include a lack of pre-arrival services (a 2018 review found that only about seven per cent of newcomers received an IRCC-funded pre-arrival service, while 71 per cent of eligible newcomers were not aware of pre-arrival services available to them); the lengthy process of immigration itself; and the difficulty of matching credentials internationally. Employer-side barriers Employer bias (a survey by Leger and OMNI found that 36 per cent of newcomers faced bias or discrimination that limited their career growth); ‘Canadian experience’ requirements (a 2019 Angus Reid Global and Vancity survey found that 70 per cent of newcomers say their work experience is less respected than Canadian work experience); a lack of recognition of international credentials, even for non-licensed occupations; employers having difficulty verifying newcomers’ credentials (67 per cent of newcomers said their professional qualifications were less respected than Canadian equivalents.) Resources and social capital Arriving with limited resources; having limited personal and professional networks (35 per cent of respondents in the Leger/OMNI survey felt that a lack of network or connections was a major career barrier); having expectations and norms that may differ from those present in Canadian workplace culture. The Path Forward While filling Canada’s skills gap will require a comprehensive approach, one area that presents immediate opportunity is that of technical and vocational professions that are not regulated by professional bodies. These professions are in high demand, require less training time, and avoid complexities related to industry recognition and regulation that are a persistent challenge for credentialled newcomers. As a result, they present an opportunity for people to quickly and effectively enter the Canadian labour market. However, an effective approach to growing Canada’s labour force will require that skills training is paired with a range of additional supports, including: Work-integrated learning opportunities, ideally with Canadian employers Connections and opportunities to network with Canadian employers and workers in their field Training on Canadian workplace culture and norms (including labour standards and rights) Language training Information about the Canadian job market and applying for jobs in Canada Opportunities to learn about civic engagement in Canada Newcomer financial literacy awareness Information about living in Canada, including housing, public services, cultural values, and banking. Together, these supports could go a long way to meeting employers’ and newcomers’ needs and could enable success far beyond what would be possible by providing newcomers solely with workplace-specific technical and vocational training. To ensure that these supports are provided, effective integration and collaboration with industry associations, employers, and immigrant services organizations will be crucial. Introducing the Challenge Current approaches to correcting labour shortages are not sufficient Canada’s Skills and Labour Market Gaps Significant skills and labour shortages threaten Canada’s prosperity Aligning Global Training with Canadian Immigration Canada’s identity and success have long been shaped by the contributions of immigrants. Global Examples of International TVET Technical and Vocational Education and Training. Global Skilling Centres Applying International Insights to the Canadian Context Recommendations To effectively support trainees to develop Canadian-recognized skills, we need a supportive environment of policy and partnerships