Canadian Occupational Projection System (COPS)

Summary of results (2022-2031)

Background

COPS is a suite of models developed by ESDC to project labour demand and labour supply, and identify labour market imbalances (shortage/surplus) for 293 occupational groupings at the national level, covering the entire workforce for the 2022-2031 period.

The COPS, process consists of two main steps:

Step 1: The assessment of recent labour market conditions (2019-2021).

The methodology relies on the analysis of about 30 labour market indicators (e.g. unemployment rate, employment growth, job vacancies growth and duration, proportion of overtime workers and EI recipients, etc.) by occupational groupings. Imbalances (shortages or surplus) are identified when indicators behave significantly different than the average for all occupations and/or their own historical norm.

Step 2: 2022-2031 projections to determine if the recent conditions will be long-lasting and/or new imbalances will emerge

First, a macroeconomic outlook (demography, immigration, economic growth by sectors, etc.) is used to determine the future long-term trends in overall employment growth and the distribution of employment across industries and occupations. Second, the projected number of job openings (new demand) and job seekers (new supply) are estimated to determine if the imbalances found in the assessment of the recent conditions (step 1) are expected to continue over the long-term and/or if new ones will emerge.

Step 1 - Recent Conditions 2019-2021

Key Findings

During the first step, the assessment of recent conditions found 58 occupational groupings facing shortage conditions up to 2019-2021, twice as many than in 2018 (2016-2018).

• Among them, 38 were of structural nature (suspected to be long-lasting), concentrated in health, as well as in natural and applied sciences related occupations.
• A surge of 20 frictional/cyclical labour shortages were also evident as the economy was recovering from the pandemic (suspected to clear over the short- to medium-term), mostly related to sales and services, as well as to construction and manufacturing.
• A total of 7 occupational groupings were found to be in surplus, mostly related to tourism.

Table 1 and Table 2 present the lists of occupational groupings that showed strong signs of shortage conditions over the period 2019-2021.

Source: ESDC 2022 COPS Projections.

Source: ESDC 2022 COPS Projections.

Table 3 and Table 4 present the lists of occupational groupings that showed strong signs of surplus conditions over the period 2019-2021.

Source: ESDC 2022 COPS Projections.

Source: ESDC 2022 COPS Projections.

Step 2: 2021-2031 projection - Job openings and Job seekers

Job openings (new labour demand): A total of 7.7 million job openings (from economic growth and replacement needs) are expected over the period 2022-2031:

About 2.8 million are projected to be new positions as a result of increasing economic activity (expansion demand or employment growth), while about 4.9 million are projected to be existing positions being vacated due to replacement needs (retirements will account for 3.9 million of the 4.9 million positions being vacated).

As a result, replacement demand (mainly from retirements) is expected to represent 63.3% of all projected job openings over the period 2022-2031, and two-thirds of all projected job openings are in occupations usually requiring at least post-secondary education or in management occupations.

Job seekers (new labour supply): A total of 7.4 million job seekers (from the school system, immigration and other sources) are projected to enter the labour market over the projection period. The increase in immigrant intake will lead to a higher contribution of job seekers. Still, school leavers will continue representing the main source of job seekers. Over the projection period:

• School leavers are expected to contribute about 5.5 million new job seekers;
• Immigrants will contribute about 2.4 million new job seekers;
• About 500,000 non-working labour market participants will drop out the labour market.

Projected inflows and outflows of the labour market, 2022-2031

Figure 1: Projected inflows and outflows of the labour market, 2022-2031

More new job openings than new job seekers are projected, mostly to absorb excess unemployment in early 2022, but the labour market will remain tight in the future.

As a result, the number of occupations in shortage is expected to remain important.

For the 2022-2031 period, 56 occupational groupings are expected to face shortage conditions:

• 37 of the 38 occupational groupings that were found to be facing structural shortages over the 2019-2021 period (Step 1). For example, Registered nurses will continue facing shortages over the projection period
• 6 out of the 20 that were found to be facing frictional/cyclical shortages over the 2019-2021 period (Step 1) are now expected to become structural and long-lasting. The occupations are mostly in trades, for example, Carpenters will continue facing shortages over the projection period.
  • The remaining 14 groupings are expected to return to balance conditions. For example, Food and beverage servers are expected to return to balance over the 2022-2031 period.
• 13 new occupation groupings are expected to be in a shortage situation, with projected new job openings outpacing projected new job seekers. For instance, Plumbers were found to be in balance up to 2021 but are now expected to face shortages over the 2022-2031 projection period.

Note that occupational groupings expected to be in shortage conditions are concentrated in health; natural and applied sciences related occupations; as well as some in construction, manufacturing and transportation.

Finally, 8 occupational groupings are expected to be in surplus, mostly related to clerical work.

The following tables present the lists of occupational groupings projected to face shortage or surplus conditions over the 2022-2031 period.

Source: ESDC 2022 COPS Projections.

Bold: occupations that already had strong signs of shortages over the 2019-2021 period.

Source: ESDC 2022 COPS Projections.

Bold: occupations that already had strong signs of surpluses over the 2019-2021 period.

Annex

Key assumptions underlying the occupational projections

Population growth

Statistics Canada’s medium population growth projection scenario

Immigration

Over the short term: aligned with Immigration, Refugees and Citizenship Canada (IRCC) spring plans, implying about 12.5 and 11.5 immigrants per 1,000 population in 2022 and 2023/2024 respectively

Over the long term: average rate of 11 immigrants per 1,000 population, about 450,000 immigrants annually

Participation rates

Projected by age, educational attainment level and gender: increasing, but at a slower pace

Overall participation rate (15+): as participation drops with age, aging implies a decline in the overall participation rate

Employment growth

With the currently low unemployment rate, employment growth will essentially be constrained by growth in the labour force starting in 2023. Massive retirements of baby-boomers from the labour market will continue to generate job vacancies, which will facilitate job search for any new unemployed individual, thereby maintaining the low unemployment rate.

Economic expansion

In line with projections from 2022 Federal Budget:

• Stable and low unemployment rate
• Slowdown in economic growth, but no recession expected in 2023
• Modest recovery in world oil prices leading to a small appreciation in the Canadian dollar
• Continued tightening in monetary policy in the short-term, returned to neutral rate once inflation back to target around 2024-2025

Structural forces

• Population aging
• Automation – Productivity gains
• Climate change – Displacement of some workers