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Special Reports

 

Capitalizing on Canada's diversity is key to nation's future prosperity

RBC report says $174 billion in higher personal incomes at stake

TORONTO, October 20, 2005 — Eliminating age, gender and cultural barriers could add 1.6 million Canadians to the work force and increase personal incomes by $174 billion according to a new report from RBC Economics, entitled "The Diversity Advantage: A Case for Canada's 21st Century Economy."

The report outlines a hard-hitting case for a national productivity agenda, containing 22 recommendations ranging from tax and policy reform, greater infrastructure funding, sweeping reforms applied to municipal finances, increased levels of immigration and ways the country should capitalize on cultural, gender and age diversity.

"With an aging population, fertility rates well below the 2.1 rate that is necessary to sustain population levels, and one in five manufacturers unable to find skilled labour, Canada needs to have an effective long-range economic strategy to ensure a successful 21st century economy and society," said Derek Holt, assistant chief economist, RBC.

Without a talented workforce, Canadian businesses will be unable to achieve corporate strategies for innovation and growth. The report suggests that immigrants, women and baby boomers approaching retirement will need to play more significant roles in the country's workforce, as Canada needs to capitalize on the broader economic benefits that a more diverse population has to offer.

"To replace retiring baby boomers and maintain our current economic performance, Canada will need an additional 2.75 million workers over the next 20 years. This is over and above future projected workforce growth derived from current immigration practices and from mapping today's employment rates for women and immigrants onto Statistics Canada's population projections," said Holt. "If immigrants and women were employed at their level of education and skills training, earning equal pay to men born in Canada, personal incomes in Canada would increase by 21 per cent or $174 billion, and 1.6 million more working-age Canadians would be employed."

A key issue in the report is immigration. Canada has been successful integrating immigrants into mainstream society; however, it has not truly capitalized upon the talents that immigrants bring with them. Many struggle when entering the workforce with their lack of employment experience in Canada, difficulties in transferring foreign qualifications and language issues, with only 40 per cent finding employment that matches their skill set. By addressing and providing solutions to each of these challenges, immigrants can be successful and productive in the Canadian workforce.

"The government needs to consider increasing the number of immigrants from current levels of 220,000-245,000 to between 300,000 to 400,000 per year, if Canada is to continue to prosper and meet future labour requirements," said Holt. "Current immigration policy will not address future workforce requirements as the boomers retire and demand for labour grows in a growing economy."

The report also highlights the need for better coordination and integration of immigration policies across municipal, provincial and federal levels of government. The current compartmentalized system is unworkable, with the federal level of government controlling immigration policies, provinces overseeing professional certifications and labour movements, and municipalities providing integration and placement of workers as well as the infrastructure needed to support immigrants.

The second diversity issue the report tackles is women. While women have made significant inroads, many continue to face challenges that prevent them from entering the workforce such as higher tax rates on second incomes, limited public and private options for childcare, early childhood education and benefits, and increased single parent families. Canada ranks sixth out of all OECD countries in terms of female labour participation, yet women still make only 82 per cent of male wages.

"Businesses need to provide more flexibility and innovative options for women such as job sharing, secondment programs within supplier chains, reduced hours and optional leaves," said Holt. "Women now outnumber men in university enrolment but remain well behind on compensation. Apprenticeship programs need to be reformed to encourage women to enter male dominated fields such as skilled trades. The fact that apprenticeship programs needlessly represent one of the last bastions of male domination in the Canadian workforce contributes heavily to our nation's shortage of skilled trade workers."

The final diversity issue the report addresses is age. The issue of mandatory retirement needs to be examined in order to alleviate future labour shortages. Business and government need to reconsider the current system of early retirement incentives and allow people the option of choosing whether to work beyond age 65.

"The cost of doing nothing on workforce diversity amounts to billions of dollars in lost income. It will become increasingly important for employers to recognize the benefits of diversity through race, gender and age, and then build a skilled workforce with a variety of backgrounds," said Holt.

The report is available online, as of 8 a.m. E.D.T. today, at www.rbc.com/newsroom.

About RBC Financial Group
Royal Bank of Canada (TSX, NYSE: RY) uses the initials RBC as a prefix for its businesses and operating subsidiaries, which operate under the master brand name of RBC Financial Group. Royal Bank of Canada is Canada's largest financial institution as measured by market capitalization and assets, and is one of North America's leading diversified financial services companies. It provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services on a global basis. The company employs 60,000 people who serve more than 14 million personal, business and public sector clients through offices in North America and some 30 countries around the world. For more information, please visit www.rbc.com.

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Media contact:
Jackie Braden, (416) 974-2124



 

Jump To
Capitalizing on Canada's diversity is key to nation's future prosperity
The Diversity Advantage:
A Case for Canada’s 21st Century Economy

(pdf 23 pages, 180kb)
Canada must fully leverage diversity if living standards are to grow, according to RBC's Nixon
The Diversity Advantage: Remarks by Gord Nixon
Newcomers to Canada


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02/27/2006 08:02:27