We are graduating highly educated students with the wrong skills for our job market. Canadian business must help fix that.

Canada has a problem most other leading economies would be delighted to have: thousands of unfilled jobs.  From the  booming  oil  sector  in  St.  John’s, Newfoundland, to the high technology Waterloo region, Fort McMurray’s still-expanding oil sands industry and Saskatchewan’s vibrant resource-based economy, companies are desperate to find the highly trained employees needed to maintain operations.

And yet despite this demand, the country also  has large numbers of unemployed and underemployed workers, equally desperate for a job and a career. It is not surprising that a sprawling, diverse country such as Canada would have imbalances between jobs and workers. But the great Canadian workplace mismatch carries the seeds of social and economic upheaval. The country’s universities and community colleges are graduating students with high aspirations for careers and incomes that increasingly are harder to fulfill. Disillusionment with the labour market is growing. Meanwhile, companies and even governments are being forced to look outside the country for employees with the skills —  and willingness to locate where the jobs are —  that they need.

Many Canadian firms now recruit aggressively in Eastern Europe, the Middle East, Africa and South Asia, looking for men and women with the requisite technical and practical skills. In the fast-food sector, companies have been recruiting overseas, particularly in the Philippines, to fill jobs other Canadians will not take. Companies working in northern Alberta maintain a constant search for skilled tradespeople, despite offering impressive salaries and benefits. High technology companies scour the list of graduates from Canadian universities, but are up against competitors from across not just Canada but also the United States. The search for skilled employees is hampered by Ottawa’s struggle to create a regime to properly recognize foreign credentials.

The roots of the problem lie in the way we manage post-secondary education. The system works primarily on a student-driven, supply-side model. Our colleges and universities mount programs, compete for students, and then seek to interest employers in the graduates. Some do this quite effectively —  the British Columbia Institute of Technology and the University of Waterloo being among the best. The annual students’ choice of college or university programs will establish, over time, the shape and nature of Canada’s trained and educated workforce. Canada leaves the vital task of determining the shape of the national workforce in the hands of tens of thousands of 17 and 18-year-olds.

Clearly this model is showing its flaws. Because the problem is a national allocation of labour, the solutions must also be pan-Canadian, and they require an active role for the federal government to ensure better labour mobility. But at the core, governments —  and the institutions that provide the education —  must take their cues from the business community. It is business that knows what skills will be needed from the workforce. It is business that must signal to the next generation of workers what those skills are, and where they are needed.

For many in the country, the emerging crisis —  best defined as ”people without jobs, jobs without people” —  makes little sense. High school graduates have been flooding the country’s colleges   and   universities   in   record numbers, spurred on by governments committed  to  accessibility  to  postsecondary  education.  The  institutions themselves   are   first   rate.   Canada’s community college system is truly impressive, and close to a quarter of our universities rank in the top 500 in the world. An emerging set of degree-granting polytechnic institutions is bridging the gap between the traditional academy and the technical training.

But there is increasing evidence, too, of the system’s shortcomings. Many university graduates struggle to find work commensurate with their years of study, spending years in serial underemployment. A surprisingly large number continue their studies in public or private colleges after finding that their degree did not  provide entry into  the middle class career they had been led to expect. There is, to put it simply, a confidence-destroying mismatch between our post-secondary institutions and the needs of the Canadian economy.

There is no indication that the problem is going to abate in the short term. The continued growth of the resource and high technology sectors puts a premium on specialized training. In sharp contrast to former Ontario premier Dalton McGuinty’s overhyping of the ”knowledge economy,” Canada actually has a highly specialized economy. The standard mantra that any post-secondary diploma or degree is a fair preparation for the modern workforce has crashed up against the reality of employers’ needs. They need people with very specific technical or professional training, not well educated but underskilled generalists.

Part of the problem rests with the choices of young Canadians. This country has developed a serious aversion to blue collar work. We are a nation of middle-class aspirants, and this includes new Canadians who often view the chance to elevate their children from the working class as a key part of Canada’s attraction. Furthermore, many young Canadians are reluctant to leave the familiarity of home to find work in the West and North, where the labour shortages are most acute.

In the past, the Maritimes were notorious for having place-bound populations. The problem has now become endemic in southern Ontario and southeast British Columbia, where the thought of accepting work in northern Manitoba or rural Saskatchewan is greeted with horror. Our growing national disdain for winter and cold, and a comparable disparagement of small town life, ends up limiting opportunities for young people looking for an entree into the workforce.

Now is the time to act. Given that a well-trained and well-positioned workforce is central to Canada’s competitiveness and economic success, there are dangerous ramifications to leaving the creation of the employee pool to such vagaries. There is an acute national interest in the workforce that exceeds our growing preoccupation with the self-actualization of Canada’s youth. And as young Canadians become increasingly aware of their uncertain job prospects, they are likely to be more open than in the past to having career-ready options and to receiving more direct intervention on how best to prepare themselves for a career.

This is where the Canadian situation gets dicey: the provinces have the constitutional  obligation for education. The provinces also share responsibility for managing the economy and, by default, the workforce, with Ottawa. So New Brunswick relies heavily on federal transfers to pay for its post-secondary system, but it is not overly concerned about the employment needs of northern Alberta or the Waterloo region. The Government of Canada, through various government agencies, works very hard on skills, training and employment, but lacks control of advanced education, easily the most crucial element in the continuing attempt to upgrade the workforce to globally competitive standards.

The emerging crisis of ”people without jobs, jobs without people” makes little sense.

And companies, for their part, are surprisingly passive in their relationships with educational institutes. The result is a mess of overlapping jurisdictions, program proliferation, half-hearted efforts to guide workers through employment insurance, and other initiatives that have had little success in matching the skills of workers with the needs of the economy.

So what can be done, given the constraints of Canadian federalism and a massive educational investment predicated on the half-fulfilled promise of the knowledge economy? Provinces have the tools to adjust their systems, with the colleges being far more nimble than the more conservative and rigid universities. But few provinces take a national perspective on the opportunities and challenges that face the Canadian workforce. Could one realistically expect a college in southwest Ontario to focus on preparing students and retraining adults for opportunities in Labrador or the Yukon?

Clearly, this is a national problem that requires national leadership. Here, too, Canada is at a major disadvantage, being the only G-8 country without a national ministry of education and therefore lacking countrywide perspectives on the core issue of our time.

The underlying problem, however, rests with using the colleges and universities as the centrepiece of our national workforce strategy. Important as post-secondary institutions are to Canadian prosperity, they are not the proper focal point for workforce preparations. Responsibility for identifying employment needs properly rests with the business community, the Government of Canada and provincial governments.

Canada urgently needs a national workplace strategy, with substantial leadership and buy-in from the business community, and with a strong commitment to building a 21st-century workforce. The market has spoken on this one. Canada requires skilled professionals, technicians, tradespeople, and apprentices. While there is still demand for a large number of graduates from the liberal arts and sciences, the market shows no sign of needing nearly as many as we produce now.

The country also needs to send the clear message to young people that the opportunities they want may well not emerge in their backyards, and that they should be prepared to look across the country —  to the East, West and North at present —  for jobs and careers.

An effective way to address the skills mismatch must involve the business community directly, for they are most directly affected by the labour shortages in key areas. A national workforce development program, organized by sector, industry, region, province or erritory, would see businesses identify fields in urgent and long-term need of properly trained personnel. This program, which the Government of Canada or regional governments could support through the tax system, would match students with opportunities, either with a company or a sector (the latter being most effective in those fields dominated by small firms).

Top students would be identified at the point of graduation from high school. They would be offered a competitive package that would include a small scholarship, summer (and potentially part-time) employment, and preferred hiring opportunities upon graduation. Students requiring financial assistance could be funded by an industry-based loan pool that, following the Saskatchewan plan (discussed below), would reward students who devoted a substantial number of years working in the field by reducing their overall debt. In this manner, Canadian businesses could get directly involved, with government assistance, in creating the workplaces that they want.

Getting past the realities of federal-provincial relations will be more of a challenge. Provinces guard their responsibility for post-secondary education ferociously, while allowing the federal government to pour hundreds of millions of dollars a year into academic research. Again, the problem needs to be addressed at the level of the workforce, not the education system. That is where there is ample federal jurisdictional space.

The Government of Canada could, as the Chrétien administration did with the Millennium Scholarship Fund, intervene through entry-level support for students pursuing what the marketplace determines are the right diplomas or degrees. This approach, however, will primarily reward students already intending to study in a high-demand area. The Saskatchewan government’s approach is different, and responds to a very different kind of problem, where qualified people have been leaving the province to pursue opportunities. Eager to break the pattern of outmigration, the province now rewards graduates for staying in Saskatchewan by forgiving a portion of their debt each year. In this instance, government responds to workplace realities by supporting company efforts to keep Saskatchewan-trained students at home.

The Government of Canada could provide comparable compensation for students in high-demand areas who are willing to work in areas of high need. An electrician or accountant who accepts a position in Fort McMurray or Prince Albert would get debt relief that would not be available if they stayed in the Greater Toronto Area, for example. This would not necessarily address the larger problem of undersupply. But it would be a step toward allocating scarce resources more effectively.

In sum, Canada requires a commitment to excellence in preparation relevance to the job market, and responsiveness to changing commercial circumstances. Not everyone need follow the national plan. Colleges and universities can and will continue to offer a wide range of programs that respond to students’ interests rather than marketplace needs, but these institutions and students should expect much less government support than in the past.

The current Canadian strategy is creating huge disconnections in terms of expectations, opportunities and careers. Graduates’ dissatisfaction is growing, in Canada and elsewhere, as nations slowly discover the formidable difference between a specialist economy and the aggressively touted, but overly optimistic, knowledge economy.

Canada will get the workforce it needs only when we turn away from relying on students, working through self-interested colleges and universities, to anticipate workforce demand —  something the universities in particular were simply not designed to do. Getting the Canadian business community fully engaged in creating the national workforce that it wants and needs will require money and commitment, from business, government and post-secondary institutions. It will also require blunt and clear communication with young Canadians about the realities of the Canadian workforce.