Finding Solutions to a Decade-Old Dilemma

In recent years, as global trade dynamics have shifted and industries evolve, Canada finds itself grappling with a pressing issue: a chronic shortage of skilled labor in its manufacturing sector. This dilemma, persisting for over a decade, has stymied advancement, deterred investment in innovative technologies, and threatened the country’s competitive edge, especially at a time when the electric vehicle and battery manufacturing sectors are poised for exponential growth.

The Current Landscape: A Labor Crisis

Mathew Wilson, Senior Vice-President at Canadian Manufacturers & Exporters (CME), highlighted in the Industrie 2030 report that the lack of a sufficiently sized and skilled labor pool directly impacts manufacturing growth in Canada. The crisis has real economic consequences; for instance, the CME reported in 2022 that labor shortages led to approximately $5.4 billion in postponed or canceled capital projects.

The urgency for skilled workers is compounded by the impending demand for skilled trades, particularly in the context of new plants and gigafactories emerging in Ontario and Quebec. The Canadian manufacturing sector is racing against time as these industries look to ramp up production amid a changing global trade landscape driven by technological and environmental shifts.

Trends Contributing to the Shortage

Several interrelated trends contribute to the labor shortage in manufacturing:

1. Aging Workforce: One in four factory workers in Ontario is at least 55 years old. This demographic shift indicates a steep decline in workforce participation as these individuals retire. With an annual average of 22,500 retirements expected through 2033, the impact on production capabilities will be significant.

2. Decreased Enrollment in Manufacturing: Despite the opportunities, fewer young Canadians are pursuing careers in manufacturing, with many opting for the construction sector instead. According to industry experts, about 500,000 skilled tradespeople in Ontario are engaged in construction, while the manufacturing sector struggles to attract new talent.

3. Wage Disparities: The average hourly wage in construction is significantly higher than in manufacturing—$37.79 compared to $34.92—as reported by Statistics Canada in July 2025. The appeal of higher wages in construction is a critical factor in the talent drain from the manufacturing sector.

4. Geographic Challenges: Many manufacturing facilities are located outside urban centers, often deterring younger workers who prefer urban living. The reluctance of potential employees to relocate to smaller towns for work creates additional hurdles for manufacturers attempting to fill vacancies.

Bridging the Gap: Attracting Future Talent

Recognizing the dire situation, manufacturing leaders like Terry Bowman of 3M Canada are taking proactive steps. The company is engaging with educational institutions to introduce high school students to career paths in manufacturing, aiming to educate and inspire the next generation.

Furthermore, a recent CME survey revealed that 64% of Ontario manufacturers are focusing on increasing wages and benefits to attract and retain talent. Simultaneously, about 40% are investing in automation and building connections with local educational institutions to bridge the skills gap actively.

However, merely investing in automation isn’t sufficient. Companies need to ensure workforce development aligns with technological advancements, advocating for a curriculum that meets the demands of a digitally-oriented landscape.

Rethinking Education and Training

The persistent issues with filling skilled roles are exacerbated by flaws in Canada’s apprenticeship system. With only around 20% of registered apprentices completing their programs, a significant gap remains between the skills taught and those required in the job market.

Experts like Stephen Murgatroyd argue for a complete overhaul of the current education and apprenticeship framework. He suggests transitioning to a competency-based model, fast-tracking the adoption of micro-credentials, and finding a way to recognize experiential learning. This shift will aim to align educational outcomes with actual market needs, essential for preparing the future workforce.

The Role of Parents and Community

Bowman emphasizes that parental influence plays a crucial role in shaping children’s career choices. Engaging families to understand the benefits of skilled trades in manufacturing can help shift perceptions and encourage young Canadians to consider these career paths.

Ensuring that teachers are well-equipped to deliver modern, digitally-focused curricula is equally essential. Addressing the current shortage of educators in Ontario is a vital step toward building a more skilled workforce.

Looking Ahead: Urgent Action Required

As manufacturers anticipate a significant demand for skilled trades, especially with upcoming projects like the new Volkswagen battery plant in St. Thomas, Ontario, time is of the essence. If immediate interventions aren’t made, the industry risks being dramatically hindered.

Canada’s manufacturers need to adopt innovative recruitment strategies, support educational initiatives, and advocate for policy changes that will invigorate the workforce. With a collaborative effort spanning industry, education, and community, Canada can turn its decade-old dilemma into a pathway for growth, innovation, and sustainable prosperity.

In conclusion, while the challenges are significant, they also present an opportunity for transformative change in the Canadian manufacturing sector. By embracing new strategies and fostering a supportive ecosystem for skilled workers, Canada can navigate this persistent issue and emerge more competitive on the global stage.

This article was originally published in the Fall 2025 issue of Plant.