A marked increase in demand for skilled labor in Alberta is driving up construction costs in the energy sec- tor, particularly in relation to oil sands projects. Federal and provincial regulations and other government obstacles inhibit the ability of labor markets to adjust to increasing labor demand. Policy reform is needed to maximize the mobility of labor. Specifically, the movement of work- ers within Canada is constrained by redundant licensing requirements imposed by the provinces. Canada’s employment insurance program also impedes labor mobility by effectively rewarding workers who remain in areas with chronic unem- ployment rather than relocating to areas with greater employment opportunities.
Foreign workers face impediments coming into the country as well. The North American Free Trade Agreement (NAFTA) facilitates the cross-border movement of profes- sionals, but fails to expedite the flow of skilled tradespeople. Workers from outside North America also face a variety of immigration hurdles.
In light of these problems, this report offers recommendations for policy reforms that would improve worker mobility, thereby increasing the supply of skilled labor in Alberta and elsewhere. Among the recommendations: 1) institute mutual licensing certification among the provinces; 2) eliminate incentives within employment insurance pro- grams that keep workers in areas where employment is largely seasonal; and 3) revise NAFTA to facilitate the cross-border flow of skilled workers.