If you let your fingers do the walking, as the commercials used to say, and you spend some time flipping through your local Yellow Pages, you can get a pretty good idea of what makes the Canadian economy tick these days.
For all intents and purposes, the Yellow Pages are a directory of services, provided by companies and individuals selling everything from accounting and acupuncture to water gardens, wedding planning and yoga classes.
Canada's service sector, which includes federal, provincial and municipal government, health care and education, as well as a vast array of private enterprise, now accounts for $758 billion worth of economic activity annually. According to Statistics Canada, that's 70 per cent of the country's gross domestic product of $1.091 trillion.
In August of this year, there were 16.49 million Canadians working and 76 per cent of them, or 12.54 million, were delivering services of one sort or another. That's not surprising since the service sector is labour intensive and, in many cases, technology resistant.
The banks have managed to eliminate a certain number of customer service representatives by installing automated teller machines. Some of the larger supermarket chains are trying to automate their checkout counters. But so far, no one has developed machines to cut hair, to prepare legal documents or to serve meals in restaurants, and the same is true for dozens of other services.
We still need people to do these things. As well, we expect our service providers to be prompt. We expect them to deliver seven days a week and often 24 hours a day. And we expect their services to be inexpensive. But all of that is about to change due to the aging of the Canadian population.
This year, the Baby Boomers - those Canadians born between the end of the Second World War and the end of the 1960s - begin to turn 60 and will begin retiring in large numbers. Indeed, experts in labour market trends including Linda Duxbury, a professor at the Sprott School of Business at Carleton University in Ottawa, predict that over the next 20 years two people will leave the workforce for every one person who enters.
That will cause profound change in the service sector. It will mean fewer people to deliver services. It will mean we wait longer, if the services are available at all, and we'll pay more. And this is not some distant doomsday scenario. It's already happening.
Many Tim Horton's outlets in Alberta now routinely close their dining rooms between 11 p.m. and 5 a.m. because they don't have the staff to keep them open. They do maintain drive-through service in order to remain a 24-hour-a-day operation.
Merry Maids of Canada, a division of Service Master Canada Ltd., based in Mississauga, Ont., is having difficulty finding people who want to clean houses and is frequently forced to turn down new business. Or, its franchisees are booking appointments three weeks in advance.
Taco Time Canada Inc., a Calgary-based quick-serve restaurant, is recruiting restaurant staff in the Philippines under a special federal program that allows employers to bring people into the country on one-year work permits.
Auto mechanics are in seriously short supply, according to Peter Steele, president of Active Green + Ross, a Toronto-based chain with 47 service stations in southern Ontario. His company is already turning down business or closing bays because of staff shortages.
Companies are responding to the tightening labour market by boosting compensation and offering various incentives to attract employees. Steele says his firm has increased wages and benefits for skilled labour by 30 per cent over the past five years, costs that get passed on to the consumer.
Tim Horton's is offering employees profit-sharing plans, shift bonuses, free buses and, in Calgary, free ski passes.
This is just the start of what Duxbury calls a historic change in labour market dynamics. "We've been in an employer's market since the boom that occurred after World War II," she says. "Now we're in an employee's market. We're going to be there for years, maybe decades, and it's only going to get worse. The numbers are unequivocal."
The question is: What do we do about all this? Some Canadians may beg to differ, but we can do without a daily stop at Tim Horton's. And people can clean their own homes. But most can't fix their vehicles, nor can they wire a house or install plumbing.
Skilled tradesmen and many other service providers are essential. Governments, educators and even parents need to encourage young people to take up trades. Governments need to rethink immigration policies to make it easier for business to tap into foreign labour pools. Retirees may have to re-enter the labour force on a part-time basis.
Otherwise, parts of the service sector may simply disappear.
(D'Arcy Jenish can be reached at jenish@businessedge.ca)
