“Canada’s EV revolution has a problem—not enough skilled labour to support it.” That was the headline for a stark analysis of the automotive industry published on February 9, 2023 in The Globe and Mail.

Reported by Adam Radwanski, the article identifies several challenges faced by an industry in the middle of a seismic shift—away from the internal combustion engine (ICE) to vehicles powered by electric motors (EV).

There is a direct line between this seismic shift and what the FOCAL Initiative is working towards. A key objective of FOCAL is to identify where the automotive industry is going in order to be prepared for the implications that the transition will have for both employers and employees. 

This transition is already occurring and the stakes are high.

One of Canada’s largest manufacturing sectors, according to the most recent available data from FOCAL, the industry directly supports 188,000 jobs in automotive production, and an additional 22,000 jobs in automotive research and technology. But, as the Canadian automotive industry report goes on to state, there are “an additional 371,400 people in aftermarket services and dealership networks.” All this adds up to a truly massive industry presence.

Canada poised to become a global powerhouse in EV production

In June 2022, the Canadian arm of the management consulting company KPMG published an influential report entitled How Canada could become a global powerhouse in EV production. The report stated: 

“While electric vehicles (EVs) are good for the planet, they could also be good for the Canadian economy. Canada has been building automobiles for more than a century, but the country has an opportunity to leverage its unique assets to build a ‘mines to mobility’ ecosystem to move Canada from a player in the EV sector to a leader.

Canada has access to many of the critical resources to become a leader: established manufacturers and suppliers, skilled labour, government support, access to critical minerals (notably lithium and cobalt) needed to build the batteries that power EVs, and proximity to the U.S. market.”

Addressing a significant shortfall

Though optimistic, the KPMG report’s reference to skilled labour underestimated the critical problem our industry currently faces and which The Globe and Mail assessment highlights.

Yes, we have skilled labour. But, right now, there’s not enough of it. And, as The Globe and Mail story suggests, the current workforce does not universally have the skills necessary to build electric vehicles.

It’s a competency shortfall, sometimes referred to as a “skills mismatch”, threatening the long-term success of EV manufacturing in Canada. And that’s where the FOCAL Initiative has a decisive role to play: by helping our stakeholders by providing data and helping to recruit, retrain and upskill the Canadian automotive workforce to confront the transformation from ICEs to EVs which, in large part, is digitally-driven.

The meaning of digitally-driven

The conventional vehicle powertrain consisting of an engine, transmission, and drivetrain will shift to batteries, electric motors, and a host of other electronic components. This shift will require the acquisition and application of a wide range of different skill sets than those prevailing in our industry currently.

And, of course, with the adoption of EVs, the research and development (R&D) automotive landscape will grow substantially, as well. The EV ecosystem is more data intensive compared with the traditional ICE vehicle ecosystem, with the result being  new data services and business models needing to be created, which will in turn create new though different jobs.

Three critical takeaways 

The most noteworthy highlights of The Globe and Mail story include:

• The decision that Stellantis NV and LG Energy Solution will partner on Canada’s first EV battery factory in Windsor, Ont., a $5.1 billion investment. This is a huge step forward.
• A warning that the shortage of skilled labour is the biggest obstacle to attracting more multinational commitments to Canada’s transitioning auto industry.
• Applause for the efforts of governments at all levels working together to court companies putting down EV manufacturing roots, thereby speeding the shift to a low-carbon economy that promises to provide Canadians with well-paying jobs and future prosperity.

Dimensions of the skills challenge

There is no doubt that the Canadian automotive industry takes the skills challenge seriously and has taken, and continues to take, strenuous steps to confront it.

As The Globe and Mail story explains: “Increasingly visible efforts are under way to address that problem, including educational and training programs. But the clear takeaway is that Canada needs to do much more to prepare for jobs of the future – both for those who have not yet entered the workforce, and those displaced and having trouble re-entering it.

The challenge is hardly unique. Labour shortages are a mounting problem internationally, including in the United States and Europe, as ageing populations take on industrial transitions. Canada, at least, benefits from comparatively open economic migration policies.”

Drawing upon a wide range of credible sources, The Globe and Mail critique observed—to take one example—that there are considerable job opportunities in the skilled trades. Citing recent Statistics Canada data, Ontario Labour Minister Monte McNaughton put the number at about 3,300, for the Windsor-Sarnia region alone.

“There is sufficient labour in the area,” Peter Frise, a University of Windsor associate dean and one of the city’s most established authorities on the auto sector, was quoted as saying. “But you’ve got to look at what kind of labour it is that you’re talking about.”

Concerns about skilled labour shortages in the auto industry are not confined to the corporate, political and academic world. Canadian labour unions are also expressing their doubts, too.

Playing catch-up

There appears to be a labour union consensus that the problems likely originated back to the 2008-2009 recession that devastated portions of the local automotive industry. At that time, it became clear—at least to Emile Nabbout, the president of Unifor Local 195 which represents vehicle supply-chain workers—that many of the old jobs could no longer be relied upon.

“Governments didn’t do enough investment in training at that time,” he was quoted as saying, before adding, “but it’s not too late. I think right now, this is just the beginning of a shift in technology.” The Globe and Mail went on to report that concerted efforts to play ‘catch up’ are underway, including the introduction of a provincially-funded career-planning centre in Windsor that has assisted nearly 300 members displaced by the 2022 closing of the Syncreon plant, which sequenced and sorted parts. As the article explains,

“Before that, in between the announcement of the Syncreon closing and its actual shuttering, Local 195 undertook an effort to better understand who the laid-off workers are, where they might land next and what skills gaps need to be addressed to get them there. It did so, using an online survey that gauged factors such as age, education, experience with specific work tasks and immediate post layoff plans.” 

Unifor Local 195 is not alone:

• Invest WindsorEssex and Workforce WindsorEssex —both economic-development and labour agencies—are introducing online programs that match skills profiles with available jobs.
• The University of Windsor’s Centre for Hybrid Automotive Research and Green Energy (CHARGE) lab, which partners with automakers and suppliers on battery research and testing, is creating training opportunities for engineering students to work in high-level EV related jobs.
• The Ontario government’s Skills Development Fund (launched in 2021) finances apprenticeships and other workplace training opportunities.

FOCAL and the auto industry digital shake-up

The Canadian automotive industry is in the middle of a dramatic and consequential digital shake-up, and the FOCAL Initiative is playing a vital part in supporting its success. Specifically, we are:

• Helping industry understand the details of the skills shortage and forecasting the supply and demand for many occupations.
• Ensuring that the auto industry understands the labour market impacts of a shift from ICE to EVs, including offering subsidies if workers are trained to work in a reduced carbon economy.
• Developing online tools to help recruit impacted workers transition to the digital automotive economy.
• Enabling employers in the sector to find and hire the employees they need.

Follow FOCAL to stay informed

We have plenty of work ahead of us and we’re geared up to handle it. Please follow FOCAL on LinkedIn, Facebook, Twitter and Instagram to stay informed about the progress we’re making and gain access to resources and special events as well as funding opportunities for employers.

We encourage everyone reading this blog to share it with their professional networks to best share these opportunities with automotive sector staff and employers. The FOCAL team welcomes your questions and feedback—you may contact us at your convenience.