Quebec could face serious labour shortfalls in the future, according to a Conference Board of Canada analysis released today.

According to the document, “From Baby Boom to Labour Crunch: Quebec’s Impending Labour Shortage,” the province could face a shortage of 292,000 workers by 2025, rising to 363,000 by 2030.

“Tight labour markets are no longer an exclusively Western Canadian concern. Quebec is already facing a lack of workers with specific trade skills, and more generalized labour shortages could be felt in the broader economy as early as 2010,” said Marie-Christine Bernard, associate director, provincial outlook, in a release.

Given current demographic trends, the overall labour force participation rate most likely peaked in 2007 and will gradually subside over the long term, the Board says. The analysis adds that by 2030 the labour shortage will amount to 8.5 per cent of Quebec’s total labour force. In comparison, Ontario’s labour shortfall is forecast to be 6.2 per cent.

Labour will provide virtually no contribution to long-term production gains in Quebec after 2020 and as a result, the growth in Quebec’s potential output—the maximum output that an economy can achieve without triggering inflation pressures—is projected to slip to 1.5 per cent by 2030.

According to the research, a large worker shortfall is not sustainable and markets will respond to it with a swift increase in real wage rates and firms would increasingly substitute capital equipment for labour.

While the Board is clear that there is no simple solution to this impending problem, it does propose two strategic approaches. One would attempt to improve labour productivity through enhanced training programs, increased access to education, and fiscal support for investment in new technologies.

The second proposed approach involves increasing the labour force itself by attracting more skilled immigrants, streamlining foreign accreditation recognition, promoting higher fertility rates, and encouraging labour market participation among underemployed groups (such as Aboriginal peoples, mature workers and women).

The Board concludes that a combination of these approaches will likely be required to address a labour shortfall in Quebec.