THE UNEMPLOYMENT PROBLEM IN CANADA AND THE NEED FOR IMPROVED INFORMATION SYSTEMS FOR HUMAN RESOURCES MANAGEMENT IN CANADA

Author: Robert T. Chisholm B.Sc.Hons.(Eng.), Visual Software Developer

Ottawa, May 2003

- SUMMARY

correction made Oct 17 2003

In Canada, between about 4.4 and 5.3 million people are unemployed in real terms, compared with HRDC / Statistics Canada’s figure of 1.281 million official “Unemployed” as at April 2003. Over 3 million people within the “Not in the Labour Force” category were actually unemployed in real terms, though this is not evident from HRDC’s published figures for April 2003. On the same date, about 14.7 million people were fully employed according to HRDC’s definition.

The true number of full-time jobs needed in Canada has therefore been known to very few people; as a result, the potential contribution to the tax base by over 4 million real-term unemployed people has gone almost un-noticed, with a similar number un-noticed probably for several decades. This also indicates the need for improved information systems in Canada to estimate and monitor the loss in tax revenue resulting from the number of persons unemployed in real terms, and to better monitor additional tax revenues accruing to government relative to investments in people, in the form of both provincial and federal social benefits (passive income support and re-training subsidies).

The implications of this for Canada are examined. In particular, the funding situation for essential government services such as health care, education, national defence and essential security services must be expected to become much worse than now, on account of the retirement of the “baby boom” generation, unless drastic corrective action is initiated without delay. The situation is already considered to be unacceptable.

Some aspects of work place social behaviour, based on tradition, are discussed, with particular reference to age-based discrimination, immigrants and turning away of job applicants based on “ lack of experience”. The author concludes that the root cause is the lack of jobs available relative to the numbers applying; further, this has been a constant problem for decades even during so-called economic “boom” periods. Continuation of this situation is considered by the author not to be sustainable.

The question of how the necessary number of new full-time jobs will be created is briefly discussed. Some revisions to government tax policies, among other things, will be necessary. However everybody has a part to play. About 3 new full time jobs are needed for every 10 which currently exist.

Apart from social concerns, the main consideration is the crippling shortage of tax revenues available to pay for essential government services which will occur, without drastic corrective action. The author concludes that a major public relations challenge must be met, in order to draw everybody’s attention to the true size and character of the problem and some of the possible solutions; this will be necessary to create the political climate required prior to commencing the actual work. Further, changes in the organisations for designing and delivering social programs will be necessary, at all three levels of government.

Finally, the author concludes that there is an inescapable business case for dealing with the problem properly; further, as part of the solution, improved information systems will be an absolute necessity. Pilot projects should be undertaken in Ottawa, to begin with; these must be accompanied by certain changes to both federal and provincial government policies.

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` NEW INFORMATION - OCT 17TH 2003

` During the past week, the author learned of a Statistics Canada report concerning unemployment in the High Tech sector of the economy, in particular the following :-

ICT – Information and Communication Tachnology

CT – Telecommunications

In Ottawa, where the author lives, this is of particular concern on account of ca. 20,000 layoffs since March 2001 (most of these from Nortel and JDS Uniphase). The report contains data specific to Ottawa. The report ‘s approach measures the drop in numbers « Employed » in these two sectors, thus it seems to correctly state the true size of the problem in these sectors.

From this we may infer that at least one federal government department - Statistics Canada – knows all about what is happening.

Reference : « High Tech Boom and Bust », by Geoff Bowlby and Stéphanie Langlois.

Statistics Canada - Catalogue no. 75-001-XPE Summer 2002 PERSPECTIVES

However it is questionable at present whether other federal government departments, the provincial government, the business community or the general public are paying attention to the information and acting on it.