Demand for employees with basic or advanced digital skills has been growing rapidly in Canada, but a swath of industries face shortages in meeting their needs


Canada faces a serious shortage in employees with digital and science, technology, engineering and mathematics (STEM) skills amid a tight labour market and rising demand for digital-oriented jobs.

To address this, Canada needs to increase its supply of people with digital skills by developing and attracting talent as well as investing in reskilling and upskilling its workforce, according to a new report from the C.D. Howe Institute.

The Knowledge Gap

In “The Knowledge Gap: Canada Faces a Shortage in Digital and STEM Skills,” author and C.D. Howe Institute Senior Policy Analyst Parisa Mahboubi examines digital skill needs and shortages in the Canadian labour market, analyzes contributing factors and offers policy recommendations.

Data prior to the pandemic shows that Canadian employers faced shortages in skills ranging from basic digital skills (5 percent) and computer science (16 percent) to information technology (10 percent) and data science and analytics (14 percent). Employer demand for digital skills in digital-oriented jobs alone grew by more than 80 percent between Feb. 2020 and Nov. 2021 and supply has not kept pace, she notes. 

All told, digital skill supply can come from new graduates, newcomers, labour market and career transitioners, discouraged workers and out-of-workforce people. In particular, Mahboubi says federal and provincial governments could do more to make immigration a tool for capturing opportunities in the digital economy by reforming immigration programs to increase the admission of immigrants with prior study-permit-holder status, particularly in STEM fields, for example. “The federal government should also ensure that the combined temporary and permanent immigration programs sufficiently increase the supply of newcomers with digital skills and that skilled immigrants receive the tailored support they need to integrate successfully into the labour market and to eliminate the underemployment of skilled immigrants,” explains Mahboubi, adding that this would require greater efforts to bolster language skills and the recognition of foreign credentials and experience.

The author also recommends employers focus on skills as many major tech companies in the United States have shifted their hiring qualifications from education to skills and eliminated a post-secondary degree requirement for jobs.

Employers also need to offer higher wages to attract more workers, provide on-the-job training opportunities to address skills gaps and recognize and support non-formal training options to expand the pool of digital talent.

Governments at all levels should also continue to support the development of domestic talent. However, the author notes, without effective retention policies, the success of strategies that help increase the number of graduates and immigrants to address shortages would weaken. Notably, Mahboubi says addressing the STEM gender gap is also more important than ever due to the digital shift, as it can potentially exacerbate existing gender inequalities in the labour market. Requiring a holistic approach, this includes:

  • Reforming the education system, ensuring availability of resources and training options for teachers to implement modernized curricula;
  • Increasing STEM enrolment and graduation numbers by raising students’ performance in STEM subjects, closing the STEM gender divide by better helping students to make study and career choices and encouraging under-represented groups to continue education in STEM fields of study by identifying and addressing their particular needs;
  • Working with educational institutions to develop and expand digital skills learning, AI, and data science courses and programs;
  • Increasing high-quality work experience options such as work-integrated learning (WIL) opportunities and expanding co-op programs in the information and communications technology sector;
  • Investing in micro-credential/certification programs that are paired with work placement for youth not in education, employment, or training;
  • Investing in the existing workforce to upskill and reskill;
  • And preventing brain drain and retaining new graduates.

Read the Full Report

For more information contact: Parisa Mahboubi, Senior Policy Analyst, C.D. Howe Institute; or Lauren Malyk, Communications Officer, C.D. Howe Institute, 416-865-1904 Ext. 0247, .(JavaScript must be enabled to view this email address)

C.D. Howe Institute — Parisa Mahboubi, Senior Policy Analyst, C.D. Howe Institute; — Bio and Archives

The C.D. Howe Institute is a national, nonpartisan, nonprofit organization that aims to improve Canadians’ standard of living by fostering sound economic and social policy.

The Institute promotes the application of independent research and analysis to major economic and social issues affecting the quality of life of Canadians in all regions of the country. It takes a global perspective by considering the impact of international factors on Canada and bringing insights from other jurisdictions to the discussion of Canadian public policy.

The Institute encourages participation in and support of its activities from business, organized labour, associations, the professions, and interested individuals. For further information, please contact the Institute’s Development Officer at .(JavaScript must be enabled to view this email address).

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