Few topics have generated as much federal attention in the past few months as encouraging workers to fill the oft-cited shortage in skilled trades. But if the provinces do not reform their regulations restricting entry to the skilled trades, the federal effort may be wasted.
Workers in the skilled trades – carpenters, plumbers, electricians, and many more occupations – are a crucial component of the Canadian labour force. According to the most recent data, 2.1 million Canadians worked in a trade for some period in 2005.
In the trades, experienced workers take on apprentices and teach them practical knowledge, while providing some payment during the training period.
The centrepiece of the federal government's March budget was a jobs grant to provide financial support to firms that provide training. There was also a federal promise to encourage firms that win federal construction projects to use apprentices.
On top of this, the government spends hundreds of millions of dollars annually on apprentices and trades workers through tax credits, job grants and Employment Insurance supports.
But the powers of Ottawa's policy measures are muted because the provinces have exclusive constitutional power to regulate apprentice programs.
While the federal government is trying to push more people into the trades, provincial regulations that restrict the number of apprenticeship opportunities are limiting the jobs for people who want to enter the trades. For instance, the most pernicious type of apprenticeship regulation is when a province sets the number of apprentices a firm can have relative to the number of experienced workers. These regulations are known as journeyperson-apprentice ratios.
The provinces have taken a wide range of approaches to setting ratios for the skilled trades. British Columbia has taken a light-handed approach and not set a specific ratio of apprentices to experienced workers for major trades. In some of the most restrictive cases – such as for electricians in Ontario or boilermakers in Saskatchewan – firms must have three and five experienced trades workers, respectively, for any additional apprentice they bring on.
Why do provinces have such restrictions? In theory, when one apprentice is able to learn from several experts, that apprentice will be better trained. This could result in customers getting better and safer work. However, limiting the inflow of people into the trade may also mean less competition in the future for current workers.
The evidence from across the country shows that there are fewer workers in trades in which firms must have more than one experienced worker for each apprentice.
Provincial regulations that result in few apprentices per experienced worker result in higher wages for people who manage to get work. However, this comes at the expense of fewer people working in a sector, especially younger workers.
If the provinces loosen entry to the trades, they can instead ensure that apprentices get the proper training by focusing on testing and verifying the quality and safety of work done.
Loosening provincial entry restrictions may prove to be a low-cost option to encourage more workers into the trades. Eliminating the most restrictive ratios would have no fiscal cost for the provinces. The federal budget promised $4-million to harmonize requirements for apprentices across the country and to examine how to use practical tests as a way to ensure trades workers are up to snuff. This may prove a bargain if it breaks down restrictive training requirements.
If companies and apprentices are free to match up on their own, without the provinces deciding how many apprentices a firm can hire, it will make it easier for Canadian firms to fix the apparent skilled trades shortage.
Robbie Brydon was an intern in 2012 and Benjamin Dachis is a senior policy analyst at the C.D. Howe Institute. Their study, "Access Denied: The Effect of Apprenticeship Restrictions in Skilled Trades," is available at www.cdhowe.org.