Opinion: When Alberta's skills and investment don't match, productivity pays the price

When Albertans talk about productivity, the conversation usually turns to technology, investment, regulation or taxes. Those things matter. But one of the immediate limits on Alberta’s productivity is much more basic: Employers cannot consistently find workers with the right skills in the places where the work needs to happen. This is often described as a [...]

When Albertans talk about productivity, the conversation usually turns to technology, investment, regulation or taxes. Those things matter. But one of the immediate limits on Alberta’s productivity is much more basic: Employers cannot consistently find workers with the right skills in the places where the work needs to happen.

This is often described as a labour shortage, which makes it sound like a recruitment problem. It is bigger than that. It is a productivity problem.

Alberta is preparing for another wave of major development. From ATCO’s Yellowhead Pipeline to a proposed West Coast oil pipeline and Dow’s petrochemical investment, the opportunity is enormous. But based on how we currently approach workforce planning, we risk leaving a significant portion of that value unrealized.

In the first quarter of 2025, 49 per cent of employers surveyed by the Alberta Chambers of Commerce reported moderate or significant staffing shortages. Without the right people, equipment sits idle, maintenance is deferred, projects take longer, and experienced employees spend more time covering vacancies or training replacements. Organizations pay for overtime, repeated recruitment, temporary housing and fly-in/fly-out arrangements.

These measures may keep work moving, but they do not necessarily make the work more productive. In many cases, they simply increase the cost of producing the same output. The economic consequences are measurable.

A Business Development Bank of Canada study found that businesses affected by labour shortages were 65 per cent more likely to experience low growth. Research from the Future Skills Centre and the Conference Board of Canada estimated that shortages in several critical skilled occupations cost Canada $2.6 billion in lost economic output in 2024. The longer-term figure is even more striking: Unrealized skills have cost Canada approximately $49 billion in foregone economic output over the past two decades.

This shows how thousands of disconnected hirings can accumulate into a serious national productivity problem. The issue is not simply whether workers are available. It is whether workers have the right skills and can be deployed in the right communities at the right time.

Productivity depends on that alignment. One employer I spoke with described the situation as “the constant pressure of competing for the same skill sets from a limited pool of candidates,” many of whom are not interested in living in rural settings. Another offered their blunt ranking of workers’ preferences: oil and gas first, mining second and forestry third.

It is striking that the industries that have driven Alberta’s economy for generations are still competing for much of the same talent, and confronting many of the same hiring challenges they faced years ago. For decades, Canada has largely treated workforce shortages as an operational problem for individual employers rather than an economic challenge that affects productivity across entire sectors. Employers recruit harder, project owners build camps, and workers travel longer distances.

These responses can help, but they often begin after shortages have already reduced productivity. A better approach would be to build workforce capacity before the crisis arrives. Edmonton has an important role to play.

NAIT’s new Advanced Skills Centre is expected to expand training capacity by 5,500 trades and technology students annually. This is a significant investment in Alberta’s productive capacity, helping expand the skilled workforce required to convert major investment announcements into completed projects, operating facilities and economic output. But increased training capacity is only part of the solution.

Governments, employers, post-secondary institutions and communities need to plan workforce capacity alongside capital investment. That means forecasting occupational demand before projects begin, expanding flexible and community-based training, sharing equipment and instructors, and creating clearer pathways from education to employment. It also means addressing practical barriers that keep people out of training, whether that is housing, child care, travel or the inability to leave work long enough to upgrade skills.

Those barriers are not separate from productivity; they ultimately affect Alberta’s ability to develop and deploy the talent it already has. Alberta has become very good at attracting investment. Our next productivity challenge is ensuring those investments can be built, operated and expanded efficiently, generating more economic value for every dollar invested.

Dr. Agatha Ojimelukwe is dean of the School of Energy and Natural Resources at the Northern Alberta Institute of Technology. Letters welcome We invite you to write letters to the editor. A maximum of 150 words is preferred.

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