July 10, 2024
By Hem Dholakia
Canada’s employers need workers with green skills but there isn’t enough skilled talent. Our research, undertaken in partnership with the Future Skills Centre, shows that Canada’s clean economy could create up to 300,000 jobs by 2030. LinkedIn’s global research data from 2023 shows that the number of job postings requiring green skills grew twice as fast as the number of green-skilled workers. If these trends continue, the availability of skilled job candidates will be the bottleneck limiting our country's ability to achieve its net-zero targets.
In response to this challenge, SPI undertook a yearlong project to understand the labour and skills shortages in several emerging clean economy sectors, including plant-based proteins in Manitoba and Saskatchewan, zero-emission vehicle and battery manufacturing in Ontario and mass timber in British Columbia. We found that skilled labour shortages are driven by multiple factors including an aging workforce, lower relative wages, and a general lack of interest and awareness in youth to pursue trades professions.
This post looks at the recent Federal Budget’s green skills initiatives and whether they begin to address the gaps in upskilling (updating existing skills) and reskilling (learning a new skill) identified through the five workshops and numerous interviews we completed for this project.
The mainstay of federal funding linked to green skills is the Sustainable Jobs Training Fund (SJTF), which has allocated more than $99 million over four years to help workers upgrade skills across three priority areas: low-carbon energy, green buildings, and electric vehicle maintenance. As the Fund receives project applications, it will be important to focus on interventions that support the growth of local or regional green skills ecosystems, such as the electric vehicle value chain in Ontario. One such intervention that we identified are financial incentives for retired tradespeople in the automotive industry. The incentives encourage retirees to instruct college students and pass on their knowledge.
The 2024 Budget includes initiatives that encourage people to enter the skilled trades, including $10 million to increase skilled trades awareness, $90 million to support small and medium enterprises to hire apprentices, eliminating interest on Canada Apprenticeship loans, and new work-integrated learning opportunities. These are welcome initiatives.
In addition, measures such as more than $99 million for Indigenous-led training and $30 million for Indigenous researchers and communities are rooted in promoting diversity and inclusion in the workforce. This is important because many equity-seeking groups face barriers to entering the workforce. The Budget’s workforce expansion initiatives are a good starting point and a step in the right direction.
However, our research suggests that when it comes to skills training, there are open questions about which are the most important skills that need to be invested in. The technical skills needed will vary by sector and occupation. For instance, we found that managerial skills would be in great demand for plant-based proteins. Woodworking skills (i.e. the ability to understand and work with wood) would be needed for mass timber, and expertise in chemistry for zero-emission vehicles will be critical. Sorting skills needs by occupation and skills gaps will allow for targeted training.
In addition, non-technical skills will be as important (if not more) as technical skills. This insight resonates with global findings that emphasize soft skills for the green transition. As projects under the SJTF are developed, earmarking a portion of the funds for non-technical skills training such as critical thinking, coordination, problem-solving, and monitoring will be essential. By combining online and traditional learning tools, context-specific training programs can be developed.
The Federal Budget also contains measures to spur private investment in on-the-job training for workers in green sectors. One example is a series of green economy investment tax credits (ITCs) that link the value of the tax credit received to the provision of on-the-job training and fair wages. The full value of new investment tax credits can only be claimed by companies if they offer apprenticeships and job shadowing opportunities in addition to paying the prevailing wage. While the total tax credit available differs by sector, the differential is the same. If labour requirements are met, an additional 10 percent credit is provided.
Going forward, the ITCs could be expanded to incentivize companies investing in the upskilling or reskilling of existing employees (an important need identified through our previous research). The encouraging news is that across most sectors, upskilling and reskilling can happen in a relatively short period. This will be critical to help workers in sectors that are expected to decline because of the energy transition.
With skills needs and gaps varying by region, more guidance will be needed for groups and communities that are leading the green skills transition in the country. To help address this, SPI has developed a guidebook on Sustainable Jobs Planning with international case studies and practical steps to help organizations plan for workforce shifts that will accompany the green labour and skills transition.
In summary, Budget 2024 has laid the foundation for a strong and skilled workforce of the future. It will be important to build upon these initial efforts to put in place a robust skills ecosystem. Future budgets will need to build upon these initiatives to ensure Canada has the green skills for a smooth and just transition.
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