LEARNING NATION:

EQUIPPING CANADA’S
WORKFORCE WITH
SKILLS FOR THE FUTURE
ADVISORY COUNCIL ON ECONOMIC GROWTH
December 1, 2017
Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Global labour markets are undergoing massive change, driven in large part by advances in technology.
Increasing automation and the rise of the so-called gig economy are displacing existing jobs while creating
new jobs that demand different skills, and changing the trajectory of our working lives. The scope and
scale of these shifts are unprecedented and will deeply affect the lives of working Canadians. We estimate
that by 2030, automation and changes in existing occupations could threaten the jobs of more than
10 percent of Canadian workers unless they acquire new skills.

Canada’s skills development infrastructure is simply not equipped to meet the challenges that lie ahead.
Our system today rests primarily on two pillars. The first one supports the development of skills before people
enter the workforce, through K-12 and post-secondary education. The second pillar supports individuals
when they leave the workforce, by providing assistance to the unemployed and the retired. That leaves a large
gap in institutional support and training during Canadians’ most productive years—and it is in this phase
that workers will be most affected by the labour market turmoil. While our system has served us well in a
relatively stable environment to date, it is not set up to address the coming labour-market disruptions.

Canada urgently needs a third pillar that focuses on supporting working adults. The Council anticipates that
managing the expected labour market changes will require an additional $15 billion of annual investments
in adult skills development. The magnitude of the coming changes also necessitates the development of a
Skills Plan for Working Canadians that will guide Canada’s approach to assisting working-age adults in
capturing new occupational opportunities. We recommend that the government1 create the Canada Lifelong
Learning Fund, which would support and provide incentives for both individuals and employers to significantly
increase their investments in skills development. At the same time, we urge the federal and provincial
governments to transform Canada’s network of employment centres so they provide hands-on guidance to
Canadians as they navigate the labour market changes brought about by technological change.

The federal and provincial governments have taken some initial steps toward building this third pillar through
recent policy changes that bolster Canada’s skills development ecosystem. While these changes are
undoubtedly a move in the right direction, the Council believes that much more substantial changes are
required—and required soon. It is time to fundamentally rethink how we equip Canadians for the work
dynamics of the future. Meeting this challenge will require a system-wide approach, and active collaboration
between employers, citizens, educational institutions, and governments. In essence, we must develop
mechanisms that support Canadians on continuous learning journeys throughout their lives.

The Shifts Underway in the Labour Market

In some important respects, Canada’s labour market rests on a strong foundation. The country ranks 13th
in INSEAD’s 2017 Global Talent Competitiveness Index, a gauge of 118 countries’ ability to develop the skills
they need to prosper.2 The World Economic Forum places Canada 14th out of 130 countries in its 2017
Global Human Capital Index, a measure of the knowledge and skills needed to create economic value.3 We
also have the highest proportion of working-age adults with post-secondary education (55 percent) in
the Organisation for Economic Co-operation and Development (OECD), although Canada lags behind leading
nations in granting advanced degrees.4

However, the world of work is changing rapidly. While this upheaval will present opportunities for many
Canadians and Canada’s economy as a whole, it will also create significant pressures, made all the more

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

difficult by the rapid pace of the change, its impact on multiple sectors at once, and the convergence of
diverse technologies. As Erik Brynjolfsson, Director of the Initiative on the Digital Economy at MIT, observes,
“Millions of jobs will be eliminated, millions of new jobs will be created and needed, and far more jobs will
be transformed.”5 New technologies are enabling more extensive automation, which is projected to replace
many of the tasks currently performed by humans across all areas of the economy. At the same time,
a wave of innovations will create new positions, but these will require different skills than the ones workers
currently have. Meanwhile, full-time employment is increasingly giving way to independent work
arrangements, which is putting pressure on Canada’s skills development ecosystem.

Job loss due to rapid technological change. Nearly half of the paid work currently performed in Canada could
be automated by technology that already exists or is being developed. Already, robots can build your car,
take your lunch order, review your legal case history, sell you insurance, or examine your X-rays. By 2030, the
growing adoption of automation is projected to displace nearly a quarter of tasks performed by Canadian
workers (Exhibit 1). While some of those most affected will be able to find alternative opportunities in the same
or related field, we expect that 10 percent to 12 percent of the workforce will face job loss and struggle to
find new positions unless they acquire new formal qualifications.6

The occupations most at risk involve physical activities in highly structured environments—jobs often held by
relatively low-skilled and often low-paid workers. For example, three-quarters of all tasks performed by
truck drivers in the mining, oil and gas, and forestry sectors could be automated.7 Leading mining companies
such as Barrick Gold, Teck, Rio Tinto, and BHP Billiton are already experimenting with driverless trucks,
robotic rock-drilling rigs, and trains that can be loaded, unloaded, and driven automatically.8 Given the pace
of technological change in most sectors of the economy, we can expect such job-threatening disruptions
in numerous other industries in the years to come.

The impact of automation is not limited to relatively low-skill occupations. Advances in artificial intelligence (AI)
are increasingly making it possible to automate complex cognitive tasks, putting jobs that require higher
skill levels in jeopardy. Machine learning will also affect white-collar workers, particularly those who focus
largely on collecting and processing data.9 Even professionals with highly specialized skills will feel the
impact. Earlier this year, for example, a team of scientists trained a machine to diagnose skin cancer with the
same accuracy levels as qualified dermatologists.10

As automation and AI creep up the skills ladder from repetitive, manual tasks to cognitive and analytical ones,
they will hollow out a range of “mid-skilled” professions and affect a large swath of the middle class. The
challenge is exacerbated by the fact that labour conditions vary significantly across the country. Hence, as we
argue in Box 1, “Jobs vs. skills: leveraging labour market information,” detailed and timely data on regional
labour-market shifts will be necessary to craft an effective response.

Of particular concern is the fact that technological innovations will heavily affect groups already under-
represented in the labour market. As discussed in the Council’s report, “Tapping economic potential through
broader workforce participation,” there is an economic and social imperative to raise workforce participation
among Indigenous people, lower-income workers, women with young children, Canadians over the age
of 55, and persons with disabilities. That task will become all the more difficult as technology replaces many
of the jobs people in these groups currently perform. For example, the World Economic Forum projects

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 White Paper 2017
Skills
Learning Nation: Equipping Canada’s Workforce with Skills for the Future
Exhibit 1 of 4

Exhibit 1 Nearly a quarter of all current work activities in Canada could be displaced by
automation by 2030

Technical automation potential and Average annual

expected adoption by 2030 earnings per
Expected automation Technical automation Employment (2016), employee (2016),
Industry adoption by 20301 potential2 million $ thousands
Transportation
38% 61% 0.9 53
and warehousing

Manufacturing 32% 61% 1.7 57

Accommodation
30% 55% 1.2 19
and food services

Mining 28% 52% 0.2 106

Agriculture, forestry,
28% 52% 0.4 58
fishing, and hunting

Construction 22% 51% 1.4 63

Retail trade 24% 49% 2.0 29

Wholesale trade 24% 46% 0.8 60

Other services (except

24% 45% 0.8 41
public administration)

Utilities 24% 44% 0.1 91

Finance and insurance 23% 42% 0.8 66

Administration and
22% 41% 1.7 64
government

Real estate 22% 41% 0.3 51

Arts, entertainment,
22% 40% 0.3 68
and recreation

Information 21% 38% 0.4 68

Professional, scientific,
19% 35% 1.4 69
and technical services
Healthcare and social
17% 33% 2.3 45
assistance

Educational services 17% 30% 1.3 53

Total 23% 45% 18.1 53

1 Percent of work activities in the sector expected to be automated by 2030

2 Percent of work activities in the sector with potential for automation given current technology.
Source: McKinsey Global Institute, Statistics Canada

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

White Paper 2017

Skills
that the global job-loss rate among women will be double that of men over the next five years as automation
Exhibit 2 of 4 office and administrative roles that are largely filled by women (Exhibit 2).11 Employment
heavily disrupts
and Social Development Canada (ESDC) forecasts that the position of administrative assistant will see the
fastest decline in employment over the coming decade.12

Exhibit 2 Top and bottom 10 occupations by employment growth, 2015–2024

Projected average
annual employment Jobs (2014),
Occupation growth (2015–24) thousand

Fastest Specialist physicians 2.6% 38

growing
Database analysts and data administrators 2.4% 30

General practitioners and family physicians 2.4% 53

Chefs 2.1% 60

Computer and information systems managers 2.0% 56

Nursing co-ordinators and supervisors 2.0% 21

Physiotherapists 2.0% 27

Information systems analysts and consultants 1.9% 175

Computer engineers (except software engineers) 1.9% 23

Social and community service workers 1.9% 14

Fastest Printing equipment operators –0.7% 18

declining
Papermaking and processing machine operators –0.8% 17

Managers in communication –0.9% 12

Other sales related occupations –1.0% 36

Industrial sewing machine operators –1.1% 16

Printing press operators –1.3% 26

Electronic service technicians –1.5% 60

Service station attendants –1.5% 16

Administrative assistants –3.0% 113

Fishing vessel masters and fishermen/women –3.0% 11

Source: Canadian Occupational Projection System (Employment and Social Development Canada)

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

New opportunities requiring new skills. History has long shown that innovations supplanting existing jobs
tend to create new positions, often in entirely new sectors.13 For example, while desktop publishing
largely made typesetting jobs obsolete, it created entirely new career paths in digital design, more than
offsetting any job losses. The same pattern continues today, but at a faster pace. “Sixty-five percent
of today’s grammar school kids will end up in jobs that don’t even exist today,” Cathy Engelbert, CEO of
Deloitte, recently told Fortune magazine’s Most Powerful Women Summit.14 One-third of new jobs
created in the United States in the past 25 years were in industries that were not around before or existed
in very different forms, such as mobile app development. In short, the net impact of technological
advances on employment can be strongly positive.

Additionally, innovation often enables new forms of entrepreneurial activity. Digital technology has introduced
e-commerce platforms that have helped countless small businesses reach new customers, often in distant
markets. It has also given entrepreneurs access to previously unimaginable productivity-enhancing solutions.

As machines take over more tasks, jobs performed by people will increasingly entail interacting with these
machines and complementing their work. For example, with automated systems increasingly performing
routine medical diagnoses, doctors can devote more time to interacting with patients and their families, tracking
patients’ mental health, or conducting medical research. But in many cases, people will need to develop
new capabilities to take advantage of emerging opportunities. Digital skills, for example, remain in short supply
in many segments of the workforce today, a problem that will become increasingly severe as jobs in the
digital economy soar in the coming years.15

Many of the new jobs will also require relatively high levels of “soft” skills,16 be it to manage and develop
talent, interact with stakeholders from diverse cultural and social groups, or find creative solutions that go
beyond simple analytical thinking.17 These skills tend to fall into the categories of social and emotional
intelligence, critical thinking and problem solving. Investing in their development will help workers gain
resilience and adapt more easily to a shifting labour market that increasingly demands them. Between 1980
and 2012, jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share
of the US labour force, while math-intensive but less social jobs—including many STEM (science, technology,
engineering, and math) occupations—shrank by 3.3 percentage points over the same period.18

In short, while addressing the displacement of workers in traditional jobs is a major concern, Canada must
equally focus on preparing its workforce to take advantage of new opportunities that will be created in
emerging sectors. This means strengthening our K-12 and post-secondary education systems to teach both
specialized and soft skills, thus building a strong platform for further skills development (see Appendix 1).
The fundamental goal must be to foster a dedication in all Canadians to continuous learning throughout
their lives.

New patterns of work. Technology is also transforming traditional employment patterns, a development that
in turn will require different approaches to training. In the past, people often worked for a single employer
throughout their careers. Now and in the future, most will have several employers or even careers during their
working lives. This presents a particular challenge for the growing ranks of older workers whose jobs
are displaced—they may need to learn new skills only a few years before retirement or face the prospect of
unemployment or a significant reduction in pay, responsibilities, and job quality.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

The decline in long-term employment is happening in parallel with the rise of independent work.19 In
developed countries, the growth of digital platforms such as Uber and Etsy has served as an enabler of
the gig economy. Today, the proportion of working-age adults engaged in freelance or contract work
hovers between 20 percent and 30 percent in the United States, the European Union, and Canada.20 While
70 percent of these individuals choose to work as independent contractors, the rest do so out of necessity.21
Contract workers’ livelihoods are often precarious, especially in fields where high competition forces them to
set their rates below what they consider fair. Many work very long hours at high intensity and to tight
deadlines to avoid saying no to assignments and risking the loss of clients.22 Independent contractors are
also at a disadvantage in keeping up with skills demanded by a changing labour market, as most lack
access to employer-led training programs.

Collectively, these trends raise a series of critical questions. How can Canada equip its citizens with the skills
to take advantage of the new opportunities the technology shifts are creating? How can it support those
buffeted by waves of workforce transformation? And, of equal importance, how do we help forge inclusive
economic growth amidst the turmoil? How do we urgently develop a strategic national response that
will equip Canadians with the skills required to succeed in the new economic environment throughout
their working lives?

In the short and medium term, it is working adults who will bear the brunt of the disruption’s impact. Over
time, inaction would seriously damage Canada’s economic stability and social cohesion. Given current
trends, the labour-market changes may lead to roughly two million Canadian workers—more than 10 percent
of today’s workforce23—losing their jobs by 2030, and lacking the prospect of finding alternative employment
unless they move to a new field requiring new skills. Government policy (including tax exemptions and
transfers) could help protect many citizens from the effects of job loss and flat or falling incomes. That said,
job quality and income earned from employment have a strong effect on individuals’ sense of self-
esteem. What is more, growing income inequality can undermine social trust and be a harbinger of intolerant
attitudes.24 Therefore, relying solely on taxes, transfers, and the social safety net to absorb the impact
of the labour-market shifts could not only place a major strain on government budgets but also undermine
Canada’s social fabric.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Global Experiments to Address Labour Market Disruption

Canada is not alone in grappling with these dramatic labour-market shifts. Some countries around the
world are developing new training systems and experimenting with novel ways of instilling resilience in their
workforces. While few proven solutions have emerged, some efforts point to possible paths forward.

Labour market innovations are evident on three key fronts: in gathering and analyzing data on the skills
needed for the future economy, in developing diverse training models, and in finding ways to support and
finance the upgrading of working adults’ skills.

1. Tracking evolving trends and needs

A nuanced understanding of current and future skills demand can improve job and skill matching, help
target educational and training programs, and empower individuals to make better-informed choices for their
careers. The Council believes that the existing government efforts and the proper implementation of the
FutureSkills Lab (an initiative we recommended in February 2017) is a step in the right direction as Canada
tries to harness the potential of reliable and timely labour market information (See Box 1, “Jobs vs skills:
leveraging labour market information”). The report “Ideas into Action: A Review of Progress Made on the
Recommendations of the Advisory Council on Economic Growth” that we are publishing alongside this report
provides more information on these efforts.

2. New Approaches to Adult Training

The Council recognizes that numerous efforts are underway at educational institutions to develop curricula
and delivery methods that help working adults adapt to the changing needs of the economy. Our post-
secondary education institutions already support the development of skills by working-age adults. Colleges
and polytechnics offer wide-ranging education and skills training options for mid-career workers that both
build resilience for those currently employed and assist with career transition and workforce redeployment for
those who are not. Through their faculties of continuing education, most universities offer a wide range of
programs that cater specifically to adult learners.

Some models being tested in Canada and abroad include:

ƒƒ Shorter, modular, and part-time programs. A number of new programs allow adult learners to take only
brief career leaves, which limits the income they forgo and thus addresses a top barrier to adult training. For
example, the British Columbia Institute of Technology (BCIT) allows mature students with previous
post-secondary experience to skip the first year of some programs and fast-track their degrees. Other
post-secondary institutions are adding shorter certificate or continuing-education programs to meet
the growing demand from adults seeking new skills. Online education start-up Udacity offers “nanodegrees”:
short programs focused on developing specific skills in data science, machine learning, mobile
programming and other highly sought occupations. Students need only invest about 10 hours a week for
six to 12 months, at a cost of about $200 per month. Nanodegrees are designed in collaboration with
leading employers such as Google, Mercedes-Benz, or IBM and, if completed successfully, lead to formal
credentials that have helped many participants secure jobs.25

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Box 1

Jobs vs skills:
Leveraging labour market information
Several initiatives already collect and analyze Canadian proposals, collecting digital market signals, supporting
labour market information with a focus on jobs. Statistics innovative labour-market information initiatives
Canada gathers data on labour demand and supply focused on employer expectations, and extracting
by job category, as well as unemployment and workforce and synthesizing emerging skills trends;
1
participation rates. The Sectoral Initiatives Program,
run by Employment and Social Development Canada ƒƒ Support innovative approaches to skills development:
(ESDC), supports industry in developing sector- encouraging, identifying, and co-financing inno-
specific labour market intelligence, national occupational vative pilot programs that address known skills gaps
standards, skills certification, and accreditation among workers of all ages, as well as post-
systems. And the recently established Labour Market secondary students and youth;
Information (LMI) Council, initiated by the Forum of
Labour Market Ministers, will work to improve local data ƒƒ Define skills objectives and guide governments and
gathering, standardize methods and terminology, training-system participants in skills programming:
and disseminate labour market information through a rigorously measuring outcomes of forward-looking,
2
new, collaborative platform. targeted training programs and initiatives that
gather skills information; identifying and disseminating
In February 2017, the Council proposed the formation best practices (nationally and internationally) to
of a national, non-governmental organization that employers, as well as education and training organiza-
would focus singularly on the study and development of tions across Canada; and determining a set of
skills and capabilities rather than jobs.3 As an arms- skills objectives for the future.4
length organization, the FutureSkills Lab would be able to
engage with all stakeholders in the skills development The FutureSkills Lab can serve as a catalyst or incubator
ecosystem and facilitate cross-sector collaboration. It for the wider ecosystem of skills-development players.
could perform three core functions: Educational institutions and skills-training organizations
could use its analysis of current and future skills
ƒƒ Identify and interpret new sources of skills information: requirements to refine their curricula and, with the lab’s
tracking labour market signals about future skills support, pilot innovative approaches to developing
needs by amassing a portfolio of pilot program skills in high demand.

1 “A new way to track the job market,” Statistics Canada, Published April 19, 2017, statcan.gc.ca.

2 “Labour Market Information Council Backgrounder,” Forum of Labour Market Ministers, Accessed on

November 1, 2017, flmm-fmmt.ca.

3 Budget 2017 included the establishment of a similar organization with a budget of $225 million over the first four years and $75
million per year thereafter. “Building a Strong Middle Class: Budget 2017,” Government of Canada, Tabled in the House of Commons
on March 22, 2017, budget.gc.ca.
4 “Building a Highly Skilled and Resilient Canadian Workforce through the FutureSkills Lab,” Advisory Council on Economic Growth,
February 6, 2017, budget.gc.ca.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

ƒƒ Stackable courses. Modular courses are most beneficial when they can be complemented with further
training in the same or related field. In some cases, students can transfer the credits they have accumulated
to other institutions where they continue building their skills base and potentially obtain a diploma or
a degree. The Australian state of New South Wales has developed a “stackable” vocational education and
training system, whereby workers’ existing skills are measured and then built upon with new training
modules. The Massachusetts Institute of Technology (MIT), meanwhile, has introduced MicroMasters
programs: Students earn credentials for completing a set of online courses and examinations, and
the most successful among them can pursue a full-time Master’s degree at MIT or another university.26

ƒƒ Online programs. Adult learners often find it difficult to combine campus-based programs with family and
work responsibilities. Many institutions now offer blended programs for adult learners that include
in-person and online components. This approach not only gives students flexibility, but allows educational
institutions to serve larger student cohorts at their facilities. Fully digital approaches are also being tried.
The US Defense Advanced Research Projects Agency is experimenting with an interactive and adaptive
“digital tutor system” to train new recruits for IT jobs. Students work with the system one on one, completing
lessons and solving related problems, and when the tutoring system judges them to have mastered
the material, it moves on to the next topic.27

ƒƒ Experiential training integrated with work experience. This method gives adult learners the confidence
that the skills they acquire can be immediately applied in the workplace.28 Red River College in Winnipeg,
Manitoba, has worked in partnership with truck manufacturer Peterbilt to design and deliver a highly
practical 12-week technician training program, which so far has helped all of its graduates secure jobs upon
completing it. SAIT’s MacPhail School of Energy in Calgary, Alberta, provides hands-on, skills-based,
and technology-focused education for careers in the energy industry. It offers students “action-based
learning” in centres of applied technology developed by industry partners such as TransAlta, BP,
and Encana.29

ƒƒ Certification for skills. Some programs recognize the skills students have acquired even if they have not
earned traditional post-secondary degrees. Singapore has implemented a Skills Framework—co-created
by employers, unions and governments—that defines existing and emerging skills needed for specific
occupational roles and facilitates the recognition of skills acquired by maintaining a database of approved
courses.30 In Canada, the prior learning assessment and recognition (PLAR) program run by most
polytechnics allows individuals with non-traditional education such as former and current Canadian Forces
members to get formal validation of formal and informal learning they have previously engaged in.
Thus, PLAR makes it easier for such mid-career individuals to transition to new occupations or get
advanced placement in post-secondary programs.

While the focus of this report is training for working-age adults, Canada’s schools, colleges, polytechnics,
and universities need to be fully mobilized in the national effort to prepare the future workforce to succeed in a
rapidly changing labour market. In Appendix 1, we outline a set of priorities to guide this collective effort.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

3. New Models for Funding Adult Skills Development

As labour market disruption requires more and more workers to upgrade their skills, individuals, employers,
and governments face a financing challenge. Innovative efforts to address this need range from ambitious
employer-run programs, to collaborations between private and public sectors, to government-financed
national strategies that involve all participants in the labour market.

Corporate programs. As global companies adapt their business models to address economic and
technological changes, they create new employment opportunities requiring skills their existing employees
may not have. Many are now experimenting with ways to upgrade their workers’ skills to fill those and
future positions.

AT&T’s Workforce 2020 Program, for example, aims to ensure that its employees’ skills will match the
company’s future needs. In 2013, the company realized that more than a third of its workers were in roles that
the organization probably would not have in a decade. AT&T launched the program to identify the skills
it will need and create a blueprint for sourcing those skills internally by retraining 100,000 employees for
radically new jobs by 2020. Since then, the company has spent about $250 million annually on the
program, including the launch of an online platform with career-planning tools, skills assessments, and skills
mapping. Employees can use the platform to identify positions they are interested in, learn about the
specific skills requirements, and find training options for acquiring those skills. The company has also
realigned performance incentives to give more weight to in-demand skills, and partnered with Georgia Tech
and others to provide low-cost, online learning. AT&T reimburses employees for the cost of training, but
workers need to do it on their own time.

The company and its employees are already reaping benefits: As of May 2016, employees had taken more
than 1.8 million emerging-technology courses, and last year AT&T filled more than 40 percent of its 40,000 job
openings with internal candidates.31

Sector collaborations. Not all employers have the size and resources to provide training to their workers. For
small and medium enterprises (SMEs), which represent the majority of Canada’s businesses, collaboration
with governments, larger companies, or non-profit organizations can get them closer to their goals.

For example, in 2001, the South Korean government set up an incentive program aimed at encouraging large
companies to help their smaller partners and suppliers upgrade their workers’ skills. The ultimate goal is
to improve the productivity of workers in the country’s SMEs, which account for more than 85 percent of all
employees. The initiative subsidizes 80 percent of the cost of training programs offered by corporations
to the SMEs in their value chain.

One participant, SK Telecom, shares its extensive eLearning library—which includes task-focused
training modules as well as ones in leadership, values, and functional training—and offers more traditional
training courses tailored to the specific needs of its SME partners. To date, SK Telecom has trained
almost 210,000 people and believes its SME partners are more productive. It says communication and
goodwill have also improved.32

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Another example of a sector collaboration are Quebec’s mutuelles de formations. These non-profit
organizations assist their mostly SME members by connecting them to low-cost training options for their
workers. The associations support businesses from a specific economic sector (mutuelles sectorielles)
or within a given geographic area (mutuelles territoriales). For example, Forma Plus, a Montreal-based mutuelle
with more than 150 participating SMEs and 7,000 combined employees, helps its members identify
common learning and development needs, then procures training services cost-efficiently and seeks
government funding if necessary.33

Palette, a rapid retraining and skill-matching platform currently being developed under the auspices of the
Brookfield Institute, aims to facilitate industry-led training, thus helping small, fast-growing companies meet
their skills needs. To do this, the platform would work with innovative companies to identify common high-
demand job skills and support partnerships with training providers to create rapid, retraining programs.

Government strategies. Some governments are developing comprehensive national strategies for upgrading
workers’ skills. These strategies include coordinating skills development frameworks and funding various
programs, while still empowering individuals to take ownership of their lifelong learning journeys.

One of the most ambitious of such programs is SkillsFuture Singapore. Launched in 2016, it is a national
initiative that supports continuous learning in response to the rapidly changing needs of the economy. The
program targets all participants in the labour market: students, early-career employees, mid-career
employees, employers, and training and education providers. It is funded through a special levy on employers
of 0.25 percent of their total payroll cost.34 The centrepiece is the SkillsFuture Credit program, which
gives every Singaporean over the age of 25 a credit worth $500 that he or she can use to pay for training from
a range of more than 18,000 government-supported courses. The credit does not expire and is topped
up periodically during an individual’s career. The aim is to make every student and worker the agent of his or
her own learning path, free to choose the type of training they feel will help them reach their career goals,
whether that means pivoting to a new industry or gaining specific hard or soft skills.

SkillsFuture includes a program specifically focused on adult skills upgrading. Through the Mid-Career
Enhanced Subsidy, Singaporeans aged 40 and above can receive a subsidy of up to 90 percent on fees for
approved courses. The strategy also tries to foster employer-led training through initiatives such as
Earn and Learn, whereby the government co-funds structured job training provided by employers to
recent graduates.

On the other side of the world, and on a more modest scale, the US State of Virginia has developed the New
Economy Workforce Credential Grant that allocates US$7.5 million per year to co-funding non-credit training
that builds worker credentials in high-demand fields. The program is designed to provide incentives for
individuals to invest in upgrading their skills and for training organizations to provide high-quality courses that
lead to recognized credentials. Students are required to pay one-third of the total cost of the program upon
enrolment, with government co-funding provided according to a pay-for-performance model.

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Box 2

Navigating labour-market change:

Skills, training, and career guidance
Given the rapid and often confusing changes in the including a digital tool that guides participants to an
labour market, individuals need expert advice to efficient qualification- or skill-development track.
understand the changing conditions and emerging Resources are particularly targeted to students pursu-
opportunities. Several countries are trying new ing degree programs with high dropout rates
approaches on this front. and workers at greatest risk of job loss as a result
of automation.
The German Federal Employment Agency, for example,
recently began a pilot for a lifelong vocational counselling The agency works directly with employers and has seen
program, aimed at supporting workers at every key some impressive early results. During the program’s first
decision point from secondary school onward. The pro- six months, more than 300,000 people used the
gram targets about four million people, or roughly digital service. SMEs, which often lack resources to
5 percent of the population. It uses a combination of invest in training, also have shown considerable
face-to-face consultations and online services, interest in the counselling program.

The Gap in Canada’s Adult Skills Development System

Canada’s current workforce training infrastructure rests on two main pillars. First, the education system gives
a foundation of broad knowledge and specialized skills before individuals begin careers. The total public
expenditure on education (K-12 and post-secondary) amounts to more than five percent of Canada’s gross
domestic product, or approximately $100 billion annually.35

The system’s second pillar—partially funded through Employment Insurance (EI)—provides Canadians who
have lost their jobs with income support, as well as career guidance and training to help them find new
opportunities.36 It is reactive and exists largely to support individuals’ re-entry into the labour market following
unemployment. Federal funding for Labour Market Development Agreements (LMDAs), which cover
training and guidance programs for unemployed individuals eligible for EI, is increasing from $2.2 billion to
$2.5 billion annually.37 The government is also broadening eligibility for LMDA-funded employment
assistance services beyond EI-eligible unemployed individuals to also support employed workers. It is also
increasing support for employers who need to upskill their workers to maintain their current employment.38

While each of these two pillars plays an essential role in the skills development system, they leave a big gap in
institutional support for working Canadians. At a time of rapid labour-market change, our system does not
sufficiently enable working adults to continually upgrade their skills.

To fill that gap, Canada must erect a third pillar. We estimate that the annual expenditure on training and post-
secondary education for working Canadians will need to increase by approximately $15 billion (Exhibit 3).
Individuals, employers, and governments have to share in this critically important investment. Failing to make
the necessary investments in the third pillar will prevent Canadians from taking advantage of new

12
 White Paper 2017
Skills
Learning Nation: Equipping Canada’s Workforce with Skills for the Future
Exhibit 3 of 4

Exhibit 3 The annual cost of adult reskilling would need to increase by ~$15 billion to manage
the effects of automation over the next two decades

Non formal training

Post-secondary education

Assumptions Projected annual adult (age 25–65) reskilling cost, $ billion

Adult participation in non-formal job-related training,

% workforce aged 25–65 44
• Current total annual cost
77% post-secondary education (all age
• Broad participation in regular training groups) is ~$20 billion
+31% required to boost the resilience Projected gap: • Annual employer expenditure on
46% of the workforce (at least 20–25% of ~$15 billion non- formal training estimated
work activities likely to be automated ~$13 billion
across all industries) • Formal educational institutions
• 31% of workforce would like to 29
30 can meet some of the incremental
participate in non-formal training, but training demand through shorter
currently face barriers modular courses
2016 2030

18
Adult enrollment in post-secondary education,
% workforce aged 25–65 enrolled

5.2%
4.0% • As adoption of automation increases,
about 10–12% of the workforce would 14
need formal retraining/education by 11
2030 to secure suitable employment in
alternative occupations requiring
new qualifications
2016 2030 2016 2030

Source: OECD Education at a Glance, Statistics Canada, McKinsey Global Institute, Conference Board of Canada, ESDC, Budget 2017

opportunities, leading to severe consequences for their families’ wellbeing and the overall growth prospects
of the country’s economy.

The funding increase is needed to address some severe shortcomings in the current system. The average
working-age Canadian receives the equivalent of just one week of job-related training annually, or 41 hours.
That figure exceeds the OECD average of 36 hours, but significantly trails some leading peers such
as Denmark, New Zealand, and Norway. What is more, this training is not evenly distributed among the
population. Only 46 percent of working-age Canadians participate in job-related training at all.
Additionally, 31 percent say they want to participate in training but are facing barriers, most significantly
insufficient time due to work or family commitments, high training cost, or lack of employer support.39

The additional investment will allow broader access to job-related training, and increase the share of working-
age Canadians who participate in training each year from fewer than half to more than three-quarters. Thus, it

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

would accommodate the 31 percent of Canadians who have the desire to upgrade their skills but face
barriers. Expanding training access is critical given the expectation that nearly a quarter of typical work
activities will be automated by 2030 across most occupations.40 Additionally, the boost in investment
would cover the cost of raising the number of working-age adults enrolled in post-secondary institutions from
about 660,000 a year to about 860,000—a 30 percent increase.41 This would meet the needs of the
approximately two million working adults who will have to acquire new qualifications and seek employment in
new fields after their jobs are displaced by technological change.

With its recent reforms, the federal government has taken some initial steps toward providing the necessary
support to working Canadians (Appendix 2). However, while these changes are undoubtedly important
and headed in the right direction, they will not be sufficient to address the march of technological change and
its rapidly growing impact on the labour market. A growing rate of job turnover means that a much wider
group of adults will need to continuously upgrade their skills and acquire new qualifications throughout their
working lives. While the government has to lead the way with a national strategy, employers and individuals
both have important roles to play.

The role of employers. For some time, Canadian employers have been significantly underinvesting in worker
training. Between 1990 and 2010, the average amount an organization spent per employee fell by more
than 40 percent.42 In the past five years, that trend has reversed direction, with spending growing from a low
of $688 per worker in 2010 to $800 in 2014-15, but Canadian companies still lag behind their US peers.43
Mid-career employer-sponsored training has proven returns though. Carleton University economists have
demonstrated that enrolment in such programs in Canada tends to boost employees’ wages by five
to nine percent and that this positive effect on wages is even stronger among low-skilled workers (up to
15 percent).44

However, when employers invest in skills development, they prioritize the professional development of their
higher-skilled and more senior staff. Managers, supervisors, and professional, technical, and scientific
personnel account for about 70 percent of the average training budget, and receive much more intensive
training than employees with lower qualifications.45 This is concerning, as it is the lower ranks of the
workforce who are most in need of skill upgrades and could benefit the most from training.

SMEs, which employ about 70 percent of all private-sector workers in Canada, often lack the resources to
develop internal training programs. They also face relatively high employee turnover, which discourages them
from investing in staff training.46

As labour market pressures mount, it will become increasingly clear to organizations that they have a deep
interest in developing their workers’ skills. Business leaders must view training not simply as a cost, but
as an investment in their organizations’ human capital. In the knowledge economy, such investments are at
least as important as those in equipment, physical structures, or intellectual property, as it is human
talent that will underpin companies’ future competitiveness.47

The role of individuals. A significant number of Canadians, representing about 4 percent of the working-age
population, are enrolled in educational institutions each year—a relatively high percentage given that most
individuals pursue post-secondary degrees before the age of 25.48 However, the rapid changes in the nature

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

of work may require many more Canadians to seek new formal qualifications. This is a difficult adjustment for
most adults, especially when they have pursued a single career path so far. Therefore, helping people make
informed choices about further education and training is critical for their future success in the workforce.

Provincial governments run employment centres (funded in part by LMDAs) that have traditionally offered
job-counselling services to unemployed Canadians. These services can also benefit employed individuals
whose jobs are at risk and who need to prepare themselves for a career change. Under recent reforms,
employment centres will be able to extend their assistance to people who are not EI recipients. However, to
serve working Canadians effectively, these counselling services must be redesigned to focus not only on
helping someone find employment but also advise a wide range of citizens on high-impact training and new
career options.

An additional obstacle for individuals who decide to pursue education or training is that most programs are
not tailored to the needs of working adults. The programs often require students to take more time
off than their circumstances permit, or do not provide sufficient opportunities to develop immediately
marketable skills.

It is critically important to raise awareness among Canadians that they will need to continuously upgrade
their skills if they are to remain competitive in a changing labour market. While government and employer
assistance is necessary, this is a challenge individuals ultimately must take into their own hands.

Our Recommendation: Skills Plan for Working Canadians

In light of the pace, magnitude, and breadth of the coming labour-market shifts, Canada’s leaders—
representing governments, employers, workers, and educational institutions—need to engage in an urgent
national dialogue on the best ways to prepare the country for the future of work. The objective of
this process should be the development a comprehensive Skills Plan for Working Canadians that will
fundamentally transform the system for upgrading the skills of working adults.49

To provide a starting point for this national discussion, the Council offers two ideas that could compose the
central elements of the strategic response the country needs:

1. New, federally governed Canada Lifelong Learning Fund (CLLF) that helps reduce the financial
barriers to continuing training for adults by co-funding investments both employers and individuals
make in skills development;

2. Transformation of the government’s employment centres into hubs of hands-on career and training
guidance not only for the unemployed but also for working adults and employers.

The Council acknowledges the continuing need to help unemployed Canadians return to the labour market
through the multi-jurisdictional architecture of the Labour Market Development Agreements (LMDAs).
We also recognize that the government is already providing some skills-development support to working
adults through the provincially administered Workforce Development Agreements (Appendix 2). However,
incremental programs will not be sufficient to address the major looming need for adult retraining.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

While the existing mechanisms represent a basis upon which to build a third pillar, we believe that the federal,
provincial, and territorial governments should re-examine, reinforce and reinvigorate these efforts through the
lens of a comprehensive Skills Plan for Working Canadians.

We believe the Skills Plan for Working Canadians should consider several guiding principles:
ƒƒ Broad conversation and national commitment. The strategy needs to emerge from a broad conversation
with all key stakeholders in the skills development system—a discussion that will raise awareness
of the challenges ahead and help forge a commitment to step up investment in this national priority.

ƒƒJoint effort. An issue of this scale cannot be addressed by just one level of government. Both federal and
provincial participants must play a role in the formulation and execution of the new plan.

ƒƒ Innovative and agile programs. The strategy should accommodate the testing of innovative interventions,
adopting, and scaling up effective ones and discontinuing less successful ones.

ƒƒ Prioritization of highest need. The plan should pay special attention to sections of the population with the
greatest need of assistance. For example, individual training grants should prioritize lower-income Canadians.
Similarly, CLLF co-funding for employee training should focus on industries undergoing significant
transformations and on SMEs that lack the resources to run their own employee-training programs.

ƒƒTailored training approaches. Most existing training is not well-suited to working adults’ circumstances, so
governments should promote new mechanisms and curricula tailored to adult learners. In particular,
the plan should encourage beneficiaries of CLLF support to enroll in courses that are modular or part-time,
offer transferable credits, combine work experience, rely on digital tools, and lead to formal credentials.

ƒƒ Seamless access. To encourage more employers and individuals to invest in skills upgrading, governments
should simplify the programs through which they offer support and make it as easy as possible to apply
for benefits. To achieve that, they should transform employment centres into customer-friendly services that
guide both individuals and employers through the available reskilling options.

Bringing the Skills Plan for Working Canadians to life

The two initiatives the Council proposes incorporate the above principles, and illustrate the steps the
government needs to take.

1. Formation of the Canada Lifelong Learning Fund. To motivate both individuals and employers to significantly
increase their investments in skills development, the government needs to deliver a jolt to the system by
providing financial incentives, while also encouraging new training practices for all industries, all ages and through-
out the country. We believe that to achieve this, the CLLF would need to match the financing currently available
for skills development through Labour Market Development Agreements, or about $2.5 billion annually.

Although the government is a key funder and strategic partner, the $15-billion annual gap in funding
for adult training needs to be filled through a joint effort. To stimulate higher overall investment in
skills development, CLLF funds should be matched at least partially by contributions of the beneficiaries
(individuals and employers).

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

The types of interventions that the CLLF should support include:

ƒƒ Co-funding employee-training initiatives by large companies undergoing major technological or business-

model transformations that require their employees to acquire new skills50;

ƒƒ Co-funding initiatives by SME consortia organized along sector or geographical lines to upgrade the skills of
member companies’ employees;

ƒƒ Co-funding skill-development initiatives led by labour unions;

ƒƒ Providing partial grants or loans to working adults who wish to enroll in programs that enable them to
pursue new professional opportunities;

ƒƒ Co-funding initiatives that allow working Canadians more time to engage in skills development, such as
paid training leave.

Given the pace and scope of labour market change, the CLLF should function in an agile and adaptive
manner, building on what works and accommodating an uncertain environment. We believe there is need
for innovation not only in the design of adult skills-development programs but also in the way they are
delivered. But time is of the essence; Canada cannot afford to engage in protracted negotiations to retool
existing federal-provincial agreements.

2. Transformation of Canada’s employment centres. These centres already serve as critical points of access
for unemployed or vulnerable Canadians. The Council supports the government’s efforts to expand
the mandate of these centres. Given the level and breadth of labour market disruption, they should offer job
counselling services not only to unemployed Canadians eligible for EI but also serve as hubs for career
and training guidance to working Canadians weighing different training options and to employers looking to
deploy new employee-training programs. The federal and provincial governments should work together
to establish national best practices and performance standards for the centres. These reforms will make it
significantly easier for both individuals and employers to access the advice and co-funding offered
through the Skills Plan for Working Canadians.

The employment centres would build two national partner networks: one made up of businesses that have
job openings, and the other comprising education and training providers that offer programs suitable for
working-age adults. Following the reform, provincial employment ministries would administer the employment
centres, as they do now, but they would use a shared performance management framework to ensure the
highest possible standards.

It is vital that the advisory services the employment centres provide rely on deep and up-to-date research into
the existing supply of skills and emerging needs across Canada’s diverse labour market. The centres
should not merely encourage more training but prioritize the development of skills in specific occupations or
sectors with a high growth potential, conveying market information to employers and workers so they
understand the opportunities and the value of investing in skills development.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

A central role for Canada’s new skills innovation lab. Canada’s new skills innovation lab (referred to as
“FutureSkills Lab” in our earlier recommendations) has a unique opportunity to play an enhanced role in the
formulation and execution of the Skills Plan for Working Canadians. It can convene the national dialogue
that Canada needs to determine how it will address the labour market disruption ahead. Given its expert staff,
the lab would also be well-positioned to advise on high-opportunity areas where reskilling efforts
under the CLLF umbrella should concentrate. It could also assess the impact of the activities under the
CLLF umbrella to help determine which programs should be expanded and which discontinued.

As businesses in nearly every industry strive to adapt to a rapidly changing global economy, the people who
work for them must change, too—by acquiring the skills future work environments will demand. While
Canadians and their employers need to be more proactive in the field of skills development—as they will be
the primary beneficiaries of such activities—we believe the government should play a leadership role
in helping both businesses and workers make the transition to this new world of continuous learning.

The labour market increasingly demands that people upgrade their skills throughout their working lives. To
thrive in a future characterized by new jobs in new industries with new patterns of work, both employers
and workers have to embrace investment in continuous learning. This focus is the cornerstone of the Skills
Plan for Working Canadians—one of the key initiatives the Council believes is necessary to reach the
goal of raising median pre-tax household income by $15,000 above current projections by 2030. Leaders in
government, business, and the training ecosystem must stand behind a vision of Canada as a resilient
learning nation so this new way of thinking enters the mainstream and becomes a national priority.

Confronting the major labour-market disruptions ahead means incorporating a third pillar into the current
system of education and unemployment support: one focused on continuous upgrading of working adults’
skills. It is a big challenge that will not be addressed overnight. Our recommendations today are a call to
action and a sign of the urgency that we attach to this issue. We also recognize the complexity of the issue
and note that initiatives of the magnitude and scope of the suggested Canada Lifelong Learning Fund
would require careful policy design to ensure that the funds are effectively targeted and achieve the desired
behavioural changes. We hope that our recommendations trigger an urgent national debate that involves
governments of all levels, employers both large and small, and Canadians from all walks of life. This debate is
necessary to find truly transformative solutions for building a workforce that is equipped to capture the
opportunities of the future.

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Appendix 1: Priorities for the Canadian Education System

Focus on transferable core and soft skills
White Paper 2017
While employers highly value core skills (such as math and science fundamentals) and soft skills (such
Skills
as communication and problem solving), they are more likely to invest in strengthening employees’ targeted,
Exhibit 4 ofskills
job-specific 4 such as industry-specific knowledge (Exhibit 4). This makes it essential for our public
education systems to focus on developing these foundational skills in the future Canadian workforce from
an early age.

Exhibit 4 Soft skills are among the most important for both entry- and mid-level job candidates,
demonstrating the need for focus on them in education

Share of employers considering skill important for Entry-level candidates

candidates at a given level, % Mid-level candidates
Important at both levels

0% 10% 20% 30% 40% 50% 60% 70%

Collaboration/teamwork skills

Communication skills

Functional knowledge

Problem solving skills

People skills/relationship-building

Customer service skills

Analytical capabilities

Creative/innovative thinking

Industry-specific knowledge and experience

Technological literacy

Sales skills

Project management skills

Leadership skills

Source: “Developing Canada’s future workforce: a survey of large private-sector employers,” AON Hewitt (2016)

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

The good news is that educational institutions and innovators of all types are already working on new
approaches to this education, with promising results.

ƒƒ Actua is an Ottawa-based organization that runs a range of programs focused on advancing students’
skills in science, technology, engineering, and mathematics (STEM), with an emphasis on groups under-
represented in the workforce.

ƒƒ Future Design School is a Toronto-based company that helps schools redesign their approach
to teaching soft skills such as creativity, communication, collaboration, and problem solving. It reviews
curricula, introduces new methodologies (such as project-based learning and experimentation),
and supports teachers’ professional development so they can apply the new approaches successfully.

ƒƒ In addition to supporting an active cluster of work- and learning-focused ventures, MaRS Discovery District,
based in Toronto, provides entrepreneurial and innovation skills training (in person and online) to thousands
of students and working-age adults—whether they are in transition between careers,
employed by corporations, or working for start-ups.

ƒƒ CORE Districts in California is one of the first experiments in making soft skills development central to
the K-12 curriculum. Eight school districts in the state currently participate in the program, in which students’
social-emotional skills (such as self-management, social awareness, self-efficacy and “growth mindset”)
account for 40 percent of a school’s performance assessment. Analysis of the results to date suggests the
scales the schools use to measure student skills are both reliable and positively correlate with key
indicators of academic performance and behaviour.51

Prioritization of specialized academic knowledge, and fundamental and applied research

As Canada transitions to a knowledge economy, deep training in specialized academic disciplines will be
critical to continuing innovation and success in a highly competitive global environment. Businesses
in many critical sectors, including healthcare, next-generation manufacturing and advanced computing,
will demand deep specialization as a source of competitive advantage, as will new knowledge-
intensive start-ups.

Higher education institutions play a critical role in producing curious lifelong learners, who renew their
knowledge on a regular basis as new developments in their fields emerge. Engaging in research and
developing the associated skills is an excellent way of preparing for future learning. In addition, institutions
should increase their offerings of short, specialized programs (certificates, professional executive
graduate programs) that will allow working adults to return part-time and expand their skills to take advantage
of emerging market opportunities.

Canada needs to boost the research intensity of its post-secondary institutions to remain competitive in
advanced areas of the knowledge economy. More students, including undergraduates, should be exposed to
research opportunities. The country should also set higher targets for the number of Master’s and doctoral
graduates while strengthening incentives for businesses to hire this specialized talent.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Vocational training that includes transferable skills

Training that builds applied skills is important to prepare students for vocational occupations. We underestimate
the vital importance of this part of our educational system in Canada. However, programs that limit training to
skills needed for a single vocation may leave students under-prepared for technological change.

Vocational education providers should continue to broaden the scope of their curricula to ensure that
students learn skills applicable to a range of occupations. Many Canadian colleges and polytechnics have
already started applying such broader competency-based frameworks.

The Foundation for Young Australians also offers an interesting model: rather than teaching skills for specific
jobs, the not-for-profit organization promotes teaching these capabilities in “job clusters”—that is, groups of
skills applicable to classes of jobs, such as technologists, artisans, or designers.52

The US State of California has tried to incorporate career and technical education53 (CTE) into its education
system, and there is evidence suggesting that such programs have a positive effect on students’ career
outcomes. Students completing CTE programs tend to have incomes 12 to 23 percent higher than their
peers—a benefit that is particularly pronounced for programs in the healthcare sector.54

Emphasis on intensive practice in workplace environments

Many studies demonstrate the value of work-integrated learning. Moreover, a majority of young people find
hands-on learning to be the most useful mode of instruction.55 Partnerships between companies and post-
secondary institutions are particularly effective at providing these types of hands-on learning opportunities
while giving students access to needed equipment, facilities, and expertise. However, such collaborations are
less common in Canada than in many other developed economies. One in five employers says that they
never coordinate with educational providers and fewer than one in ten do so on a monthly basis.56

All participants in the skills-development ecosystem should increase the number and diversity of work-
integrated learning opportunities for Canadians of all ages. The Canadian government has committed to
encouraging work-integrated learning by supporting 10,000 work-integrated placements for post-secondary
students through the not-for-profit organization Mitacs, helping students to gain experience and skills in
the private sector. It also recently launched the Student Work-Integrated Learning Program, which will support
partnerships between employers and post-secondary education institutions.57 The Business Higher
Education Roundtable (BHER), a partnership of Canada’s largest companies and post-secondary education
leaders under the auspices of the Business Council of Canada, is also advancing the cause by creating
more sector-focused work-integrated learning opportunities for students.

Promotion of international educational experience

In an increasingly interconnected world, international education is not a luxury but a vital tool to equip
Canadians for success. As the global centre of economic gravity shifts from west to east, Canadians
who gain experience working with people from other cultures, especially from emerging markets, will have
a crucial edge.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Canada needs a strategy for promoting global education, one developed by stakeholders beyond just
educational institutions. Currently, only 11 percent of Canadian university undergraduate students participate
in organized educational experiences abroad over the course of their degree, as opposed to 33 percent
in France, 29 percent in Germany and 19 percent in Australia. What is more, Canadian students heavily favour
traditional destinations, such as Europe, over emerging markets—only 3 percent of all students who went
abroad in 2016 chose a Chinese institution.58 The Study Group on Global Education recently recommended
establishing Go Global Canada, a national initiative that would see 15,000 post-secondary students per
year go abroad over the next five years, increasing that number to 30,000 per year within 10 years. The group
also advocates a focus on emerging-economy destinations and targeted support for students from lower-
income families and under-represented groups.59

Fostering a culture of life-long learning

Life-long learning habits need to be instilled early. As such, much of the responsibility for cultivating them
lies with parents and the K-12 educational system. We believe that in light of the significant labour-force
changes that lie ahead, Canada needs to undertake a comprehensive review of the K-12 education system
to ensure we equip young people with the skills to thrive in the future workforce. Educational programs
should embrace a variety of methods for encouraging students to be active learners, such as the use of more
flexible curricula and a greater focus on projects that ask students to solve practical problems.

Universities, polytechnics, and colleges can also play a key role later in people’s lives by engaging their
alumni not only as passive supporters but as continuing students throughout their careers. Many professional
programs already follow this model. Medical schools, for example, maintain active relationships with
physicians, offering them opportunities to study advances in their fields, usually in partnership with relevant
professional associations. Making our already strong post-secondary education system a core player in
the new Skills Plan for Working Canadians will be critical to the strategy’s success.

Appendix 2: Government Investment in Adult Skills Development

In recent years, the federal and provincial governments have recognized the need to improve its support for
working adults as they adjust to the new world of work.

Education (first pillar). Approximately $5.5 billion of the federal and provincial governments’ funding for post-
secondary educational institutions goes toward the training of the 660,000 working-age Canadians
enrolled in these schools.60 The federal government provides additional support and incentives through the
Canada Student Loans Program (about $769 million in loans and $241 million in grants to students aged
25 or above in 2015-16). It also offer the Lifelong Learning Plan, a program that allows individuals to finance
their own or their spouses’ full-time training or education by withdrawing money from their registered
retirement savings plans (RRSPs), but has seen limited uptake since it was launched nearly 20 years ago.

In 2017, the federal budget allocated an additional $454 million over four years to providing adults who wish
to enrol in further post-secondary education access to student loans and grants. As well, the budget
proposed expanding eligibility for Canada Student Grants and Loans to part-time students and full- and part-
time students with children, as well as the introduction of a three-year pilot project that will test new
approaches to helping adult learners qualify for Canada Student Loans and Grants.

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Learning Nation: Equipping Canada’s Workforce with Skills for the Future

Support for the unemployed (second pillar). The government provides approximately $3 billion annually in
funding to provinces and territories to deliver a range of training and employment programming for Canadians
through Labour Market Transfer Agreements (LMTAs). Provinces and territories design and deliver the
programs and services funded under these agreements to meet the needs of a wide variety of clients including
unemployed workers eligible for EI, unemployed workers not eligible for EI, low-skilled employed workers,
persons with disabilities, and older workers. In 2016-17, LMTAs included the following investments in skills
development: $2.1 billion for LMDAs, $550 million for the Canada Job Fund Agreements, $222 million
for the Labour Market Agreements for Persons with Disabilities, and $25 million for the Targeted Initiative
for Older Workers.64

While the bulk of Canada’s training and employment programming supports the unemployed (whether
EI-eligible or not), Canada’s approach has evolved significantly in recent years, expanding eligibility for
support, streamlining existing transfer agreements and increasing funding.

The government is broadening eligibility for programs and services under the LMDAs to create
more opportunities for Canadians to upgrade their skills, gain experience, or start businesses. Specifically,
provincially run employment centres will be able to offer employment assistance services to all
Canadians, not just the unemployed, and will provide support measures to employers who need to retrain
their employees.65

Following stakeholder consultations and a comprehensive review conducted in collaboration with provinces
and territories, the government announced that it is undertaking a significant reform of the LMTAs, including:

ƒƒ Consolidating the existing Canada Job Fund Agreements, Labour Market Agreements for Persons with
Disabilities, and the Targeted Initiative for Older Workers into Workforce Development Agreements
that would make transfers to provinces and territories simpler and more flexible to meet the specific needs
of individuals, workers, employers 66 in the region;

ƒƒ Introducing rigorous performance management that will track the earnings and employment outcomes
of individual participants.

The 2017 federal budget allotted additional investments in skills development programs, including
an additional $1.8 billion over six years for LMDAs and an additional $900 million over six years for the new
Workforce Development Agreements.

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

1 Note that throughout the report, we use “the government” to refer to the Government of Canada.

2 The Index measures a set of policies and practices that enable a country to develop, attract, and optimize the human capital that

contributes to productivity and prosperity. Bruno Lanvin and Paul Evans, eds., “The Global Talent Competitiveness Index, 2017,”
INSEAD, 2017, gtci2017.com.
3 “The Global Human Capital Report 2017: Preparing people for the future of work,” World Economic Forum, 2017,
weforum.ent.box.com.
4 It should be noted that a significant share of students with post-secondary education do not complete four-year degrees.
Therefore, Canada performs less well in terms of the share of graduates that have a masters or doctoral degree (9 percent versus
13 percent OECD average), and the successful placement of those graduates in the economy. Müge Adalet McGowan and
Dan Andrews, “Skills Mismatch and Public Policy in OECD Countries,” OECD, April 28, 2015, oecd.org.
5 Emily Anthes, “The shape of work to come,” Nature 550, 316–19 (2017). nature.com.
6 Unpublished McKinsey Global Institute analysis of Canada’s labour market; the findings are consistent with the work of Frey &
Osborne. Carl Benedikt Frey and Michael A. Osborne. “The future of employment: How susceptible are jobs to computerisation?”
Technological Forecasting and Social Change 114 (2017): 254-80. oxfordmartin.ox.ac.uk.
7 James Manyika, Michael Chui, Mehdi Miremadi, Jacques Bughin, Katy George, Paul Willmott, and Martin Dewhurst, “A Future That
Works: Automation, Employment and Productivity,” McKinsey Global Institute, January 2017. mckinsey.com.
8 Tom Simonite, “Mining 24 Hours a Day with Robots,” MIT Technology Review, December 28, 2016, technologyreview.com.
9 Leonid Bershidsky, “Machines Can Replace Millions of Bureaucrats,” Bloomberg View, February 9, 2017, bloomberg.com.
10 Andre Esteva, Brett Kuprel, Roberto A. Novoa, Justin Ko, Susan M. Swetter, Helen M. Blau, and Sebastian Thrun, “Dermatologist-
level classification of skin cancer with deep neural networks,” Nature 542, 115–118 (2017), nature.com.
11 “The Industry Gender Gap Women and Work in the Fourth Industrial Revolution,” World Economic Forum, January 2016,
www3.weforum.org.
12 In the long term, jobs in growing sectors may counter declines in positions affected by automation, as is the case with healthcare
services to ageing populations that are today predominantly performed by women. Neil Howe, “The Spread of the Pink-
Collar Economy,” Forbes, February, 28, 2017, forbes.com. Employment and Social Development Canada projects that healthcare
and social assistance will be the industry with the second-highest employment growth in Canada between 2015 and 2024
(1.8 percent annually), trailing only Computer System Design Services (2.4 percent annually). “Canadian Occupational Projection
System,” Employment and Social Development Canada, Accessed November 1, 2017, occupations.esdc.gc.ca. This is the
reason why a recent analysis by Patricia Meredith argues for policies to support the growth of the so-called “caring economy.”
Patricia Meredith, “Reforming the Income Tax Act to Drive Inclusive Prosperity and Support the Caring Economy,”
August 4, 2017, ourcommons.ca.
13 Manyika et al, “A Future That Works: Automation, Employment and Productivity.”
14 Clifton Leaf, “A Day Without Manterruption,” Fortune, October 10, 2017, fortune.com.
15 Anthes, “The shape of work to come.”
16 Also referred to as “social and integrative skills.”
17 Manyika et al, “A Future That Works: Automation, Employment and Productivity.”
18 David J. Deming, “The Growing Importance of Social Skills in the Labor Market,” The Quarterly Journal of Economics 132, vol. 4
(2017): 1593–1640, nber.org.
19 Often referred to as freelance work, independent work has three defining characteristics—a high degree of autonomy; payment by
task, assignment, or sales; and a short-term relationship between worker and client. James Manyika, Susan Lund, Jacques Bughin,
Kelsey Robinson, Jan Mischke, and Deepa Mahajan, “Independent work: Choice, necessity, and the gig economy,” McKinsey
Global Institute, October 2016, mckinsey.com.
20 According to Statistics Canada, 1.9 million Canadians are self-employed, while another 2.3 million are classified as temporary
employees. Combined, these two groups make up over 20 percent of the Canadian workforce.
21 Manyika et al, “Independent work: Choice, necessity, and the gig economy.”
22 Anthes, “The shape of work to come.”
23 Projections indicate that by 2030, as much as a quarter of all work activities in Canada are likely to be displaced by automation.
However, judging by previous waves of automation, a substantial share of the most affected workers would be able to find alternative
opportunities in the same or a related field without the need to acquire new formal qualifications. James Manyika, Susan Lund,
Michael Chui, James Bughin, Parul Batra, Ryan Ko, and Saurabh Sanghvi, “Jobs lost, jobs gained: Workforce transitions in a time
of automation,” McKinsey Global Institute, November 2017; OECD research confirms these findings, highlighting that about
10 percent of Canadian workers are in jobs at a high risk (over 70 percent) of being automated. Melanie Arntz, Terry Gregory, and
Ulrich Zierahn, “The Risk of Automation for Jobs in OECD Countries,” OECD Social, Employment and Migration Working Papers,
No. 189, May 2016, oecd-ilibrary.org.

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

24 Richard Dobbs, Anu Madgavkar, James Manyika, Jonathan Woetzel, Jacques Bughin, Eric Labaye, and Pranav Kashyap,
“Poorer than their parents? A new perspective on income inequality,” McKinsey Global Institute, July 2016, mckinsey.com.
Eric Uslaner and Mitchell Brown, “Inequality, Trust and Civic Engagement,” American Politics Research 31 (2003), russellsage.org.
25 “Nanodegree Plus: Get a Job or Your Money Back,” Udacity, Accessed on November 1, 2017, udacity.com.
26 “MITx MicroMasters: Bringing MIT to you,” Massachusetts Institute of Technology, Accessed on November 12, 2017,
micromasters.mit.edu.
27 Anthes, “The shape of work to come.”
28 Work-integrated learning is also beneficial for employers. A study of Canadian apprenticeships found that employers get returns
of $1.47 for every $1 spent on such training. “It Pays to Hire an Apprentice: Calculating the Return on Training Investment for Skilled
Trades Employers in Canada,” Canadian Apprenticeship Forum, 2009).
29 “Action-Based Learning,” SAIT MacPhail School of Energy, Accessed on November 5, 2017, sait.ca.
30 “Skills Framework,” Skills Future Singapore, Accessed on November 1, 2017, skillsfuture.sg.
31 John Donovan and Kathy Benko, “AT&T’s Talent Overhaul,” Harvard Business Review, October 2016, hbr.org; Aaron Pressman, “Can
AT&T Retrain 100,000 People?” Fortune, March 15, 2017, fortune.com; Thomas Friedman, Thank You for Being Late: An Optimist’s
Guide to Thriving in the Age of Accelerations (New York: Farrar, Strauss and Giroux, 2016).
32 Dominic Barton, Diana Farrell, and Mona Mourshed, “Education to Employment: Designing a System that Works,” McKinsey
Center for Government, January 2013, mckinsey.com.
33 “Leveraging Training and Skills Development in SMEs,” OECD, 2012, oecd.org.
34 “Skills Development Levy (SDL) System,” Skills Future Singapore, Accessed November 1, 2017, sdl.ssg.gov.sg.
35 “Government expenditure on education, total (% of GDP),” The World Bank, Accessed November 12, 2017, data.worldbank.org.
36 We note that there are several programs supporting employed working-age adults who are looking to upgrade their skills.
These include the Canada Student Loans Program, the Canada Student Grants Program, the Canada Job Fund, the Labour Market
Agreements for Persons with Disabilities, and the Targeted Initiatives for Older Workers (more information in Appendix 2).
37 Transfers under the LMDAs are planned reach $2.5 billion by 2022-23.
38 In addition to LMDAs, the Government transfers funds to provinces and territories under the Canada Job Fund agreements
to design and deliver employment and training programs targeting non-EI eligible unemployed workers, low-skilled employed
and employers, through programs such as the current Canada Job Grant. Note that the Canada Job Fund will soon to be
consolidated with Labour Market Agreements for Persons with Disabilities and the Targeted Initiative for Older Workers into the
new Workforce Development Agreements.
39 “Education at a Glance 2017: OECD Indicators,” OECD, Accessed November 1, 2017, oecd.org.
40 Manyika et al, “Jobs lost, jobs gained: Workforce transitions in a time of automation.”
41 “Postsecondary enrolments, by program type, credential type, age groups, registration status, and sex,” Statistics Canada, Table
477-0033, Accessed on November 1, 2017, www5.statcan.gc.ca.
42 While part of the decline could be attributed to difficulty in aggregating spend data from different parts of the organization and the
economic turbulence caused by the global financial crisis, employers’ strategic choices surely play a role in, too.
43 Simon Cotsman and Colin Hall, “Learning and Development Outlook 2015,” Conference Board of Canada, December 2015.
44 Wen Ci, Jose Galdo, Marcel Voia, andChristopher Worswick, “Wage Returns to Mid-Career Investments in Job Training
through Employer-Supported Course Enrollment: Evidence for Canada,” Institute for the Study of Labor Discussion Paper 9007,
April 2015, ftp.iza.org.
45 Ibid.
46 Barton et al, “Education to Employment: Designing a System that Works.”
47 Amy Edmondson and Bror Saxberg, “Putting lifelong learning on the CEO agenda,” McKinsey Quarterly,
September 2017, mckinsey.com.
48 “Postsecondary enrolments, by program type, credential type, age groups, registration status and sex.”
49 In a forthcoming book, Isabel Sawhill of the Brookings Institution proposes a “GI Bill for America’s Workers,” an idea that similarly
focuses on mid-career skills development on a national scale. Isabel Sawhill, The Forgotten Americans and the Dignity of Work (Yale
University Press, forthcoming, 2018)
50 This would represent a significant scaling up of the current activities of the Canada Job Grant program which co-funded employer-
led training of 362,000 workers in 2014–15 (Employment and Social Development Canada data).
51 Martin R. West, “Should non-cognitive skills be included in school accountability systems? Preliminary evidence from California’s
CORE districts,” Brookings Evidence Speaks Reports, Vol 1, #13, March 17, 2016, brookings.edu; “Data-Driven Change: A School
Community Champions Growth Mindset,” Core Districts, Accessed on November 1, 2017, coredistricts.org.
52 “The New Work Mindset: 7 New Job Clusters to Help Young People Navigate the New Work Order,” The Foundation for Young
Australians, 2017, fya.org.au.

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 Learning Nation: Equipping Canada’s Workforce with Skills for the Future

53 Career and technical education is the term commonly used in the United States to refer to vocational education.
54 Ann Huff Stevens, Michal Kurlaender, and Michel Grosz, “Career Technical Education and Labor Market Outcomes: Evidence from
California Community Colleges,” NBER Working Paper 21137, April 2015, nber.org.
55 Barton et al, “Education to Employment: Designing a System that Works.”
56 Ibid.
57 “Building a Strong Middle Class: Budget 2017.”
58 Rita Abrahamsen and Randall Hansen, “Global Education for Canadians: Equipping Young Canadians to Succeed at
Home and Abroad,” Study Group on Global Education, November 2017, goglobalcanada.ca.
59 Ibid.
60 “Financial Information of Universities and Colleges (For the Fiscal Year Ending 2016),” CAUBO, Accessed
November 1, 2017, caubo.ca.
61 Employment and Social Development Canada data
62 “Building a Strong Middle Class: Budget 2017.”
63 Including under-represented groups such as Indigenous peoples

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