Thanks very much for allowing us to be here today. We're thrilled to talk about a subject that is hot in the minds of small and medium-sized business owners from coast to coast: the shortage of skills and the increasing shortage of labour.
We've been on this issue for a number of years now—certainly it was peaking right before the recession—where small businesses across Canada wanted to talk to us about precious little else other than the problems they were having in finding, recruiting, and keeping staff. That obviously took a bit of a dip during the recession, but I note with interest that during the worst of the recession 40% of small and medium-sized businesses continued to say they had struggles finding the people they needed to put their products and services to market.
That is pretty compelling evidence, because while of course the problem of unemployment during the recession was significant and still is in certain parts of the country, prior to the recession we started to turn a great deal of attention to skills and labour shortages. That did take a necessary diversion, but I'm hoping we can get back on track, because of course any cursory look at Canada's demographic suggests that this problem is going to be with us for a great number of years to come.
I've put a deck in front of you today that gives you a bit of an overview of some recent data from CFIB. Some of it is a little older. When we asked our members what their main business constraints were after the sluggish domestic demand for their products and services, the shortage of skilled labour was number two. The shortage of unskilled and semi-skilled labour was also increasingly growing as an item of concern to small and medium-sized firms. As you see in the fourth graph that I've provided to you, that shortage of skilled labour is growing.
As we often say when we're asked about skilled labour, more and more small businesses are saying that skilled labour includes people who will show up to work, people who will work a full week without disappearing. Some of these are the skills small and medium-sized businesses are looking for.
The good news, when we look at employment plans for small and medium-sized firms, is that we've started to see a bit of a gap between those firms looking to hire and those firms looking to downsize. That is the first time we've seen that in a while. It's been bobbing up and down a bit as we come out of the recession, but we're starting to notice a significantly larger number of our members planning to hire than planning to downsize, which again is good news for the economy, good news on many fronts, but can be bad news when we're looking at skilled labour and other labour shortages.
Overall, 46% of our members across Canada say that the shortage of qualified labour is an issue to them. Broken down by province, I want to note that this is not just a western Canadian problem. It is highest at the moment among our members in Saskatchewan. Two-thirds of our members in Saskatchewan say they're struggling to find workers. The second-highest observation of that concern is in Newfoundland and Labrador. In Newfoundland and Labrador, 56% of our members say it is a concern. Quebec and Nova Scotia are right in the middle of the pack on that list. In New Brunswick, P.E.I., and even Ontario and B.C., there's a little bit less concern there, but it's still a top issue for many firms.
When we ask about labour shortages, what do small businesses need most? A lot of time and attention, particularly attention to the temporary foreign worker program and the programs for skilled immigrants, has focused on highly skilled individuals and bringing them to Canada to address skill shortages. But more than anything else our members tell us they are increasingly finding the toughest time in recruiting people for the national occupational classification categories C and D, those jobs that are more entry-level in orientation, jobs that perhaps require just on-the-job training or perhaps just a high school diploma or occupation-specific training. That has a lot to do, of course, with the fact that there are still a large number of small and medium-sized businesses in rural communities. A lot of rural communities have lost a great deal of their youth, and therefore the entry-level positions are going begging.
This is a key graph for us done prior to the recession, but chart number nine talks about the gap between the people who the immigration system and the temporary foreign worker program are bringing in relative to the needs of business. What it shows is that, generally speaking, the permanent immigration system brings in only those at the highest level on the skills, education, and job experience ladder, and yet the jobs that are in highest demand among small and medium-sized firms are actually at the entry level, at the semi-skilled level, and in the trades.
The permanent immigration system does a terrible job of matching the needs of Canadian small and medium-sized businesses. A much better job is done by the temporary foreign worker system in Canada, but even there a lot of the recent changes that are positive are applicable only to higher-skilled immigrants. For those in the service sector, such as the hoteliers, the restaurants, and often for those in the resource sector, the changes to the temporary foreign worker program that Minister Kenney has made—the very good changes he has made—do not apply, and it is something we would like to see happen.
The government has recently made a bunch of employment insurance changes. We're very optimistic about the changes directionally. On the comments of Minister Flaherty, the “no bad job” comment resonates extremely well with small and medium-sized businesses. It certainly is the language they're using themselves.
Again, the EI changes directionally are very positive. I want to note that 22% of our members tell us that they feel they are competing for workers against the employment insurance system, and 16% of our members say they have been asked by an employee to lay them off so they can collect employment insurance benefits. This is very disturbing information—things that freak us out as employers—and is one of the reasons why we need to make substantive changes to employment insurance.
The changes that have been proposed are very small. Directionally, they're headed the right way. They are certainly not draconian changes by any means whatsoever, but the real proof is on implementation, and this is where we are nervous. If, on EI right now—