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
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