Ontario's Long-Term Report on the Economy
Chapter III: Employment Trends

Introduction

Economic pressures related to globalization and technological advances have led to changes in the labour market and the nature of employment. It is all but certain that technological progress will continue in the future; however, it is less certain whether globalization will have as much impact as it has had in the past. While there are challenges, it should also be recognized that the labour market continues to function well for most people. The Ontario economy produced 76,400 net new jobs in 2016, nearly three-quarters of which are standard full-time jobs. Steady employment gains since the 2008–09 global recession have led to continued improvements in Ontario’s unemployment rate, which was at an eight‐year low at 6.5 per cent in 2016.

This chapter describes the key economic forces and pressures that are affecting employment. It highlights the changes that are taking place and the opportunities and challenges that have arisen. A discussion of government initiatives that help to address some of the challenges is also provided.

The following key trends have been identified:

• A divergence between economic growth and measures of well-being;
• Shifting employment from goods-producing industries — in particular, manufacturing — to service-sector industries;
• Declining shares of middle-skill and middle-paying occupations, along with increasing shares of high-skill and high-paying occupations and lower-paying, non-routine manual occupations;
• Rising types of alternative employment — in particular, alternative forms of employment, many of them involuntary and non-standard; and
• Increasing diversity of the workforce.

Globalization of markets and technological advances have led to intense competitive pressures and have acted in interconnected ways to increase the competition for goods and services, as well as the risks and uncertainty faced by employers. In response, employers have restructured their operations and increased their use of outsourced and offshore employment.

Many employers have restructured the way they compensate and manage their employees. Some have shifted risk and uncertainty onto employees by scaling back employer benefits and pensions and by switching from standard work that was reasonably stable and secure to contingent jobs (based on need at the time) and other forms of alternative employment.

Some lead employers have restructured operations and now subcontract and outsource parts of the production of goods and services to competing groups of small employers in a process called fissuring.¹ The intense competition among the small employers reduces costs and likely results in lower wages and fewer benefits.

The government is working to create the conditions and supports to address the changing nature of employment, including examining how to modernize Ontario’s labour and employment laws,² increasing access to affordable, quality child care, strengthening income security, encouraging the federal government to review Employment Insurance (EI), investing in support for workers during periods of employment transition and improving workplace safety.

Competitive Economic Pressures

Globalization

The globalization of product and labour markets has had a major impact on employment in Ontario. It was facilitated by freer trade deals, such as the Canada–U.S. Free Trade Agreement and the North American Free Trade Agreement, which reduced and eliminated tariffs and encouraged more trade. For Ontario, the increase in international trade, primarily with the United States, has been much more rapid than interprovincial trade. In this context, Ontario businesses must compete with businesses in the United States and other nations that operate in a different regulatory and cost environment, putting pressures on them to reduce costs.

In addition to freer trade deals, globalization was enabled by reductions in transportation costs from containerization and other advances in logistics, and by reductions in information and communications costs. One measure of globalization is how fast international trade has been growing relative to the size of the global economy. From 1980 to 2015, international trade has grown at about 5.4 per cent annually, while growth of world gross domestic product (GDP) has been about 3.5 per cent annually. As shown in Chart 3.1, the International Monetary Fund projects that growth in trade will slightly outpace world GDP growth over the next five years.

Other changes associated with globalization include more mobile capital, growth of supply chain production, increased mobility of highly skilled workers and an increased flow of technology and ideas across borders.

Technological Advances

Technological progress is a key driver for increasing productivity and economic growth. As shown in Chart 3.2, since the first industrial revolution began more than 250 years ago, there have been two additional periods of major industrial change. Some believe that a fourth industrial revolution is underway and, like each past revolution, this one is expected to lead to major disruptions in employment and challenges to retrain and re-employ workers.³

Technological advances over the past few decades have driven the globalization and integration of markets through the development and use of ever-more powerful computers and sophisticated software. Other advances include the internet, increased automation and digitization, machine-to-machine communication and developments in artificial intelligence. Technological change has also led to growth of the sharing economy, with the emergence of companies such as Airbnb and Uber.

These advances have displaced workers, primarily from jobs involving routine manual tasks. At the same time, technological progress has created new opportunities for highly skilled workers with abstract problem-solving abilities, as well as less highly skilled employees in positions that require significant human interaction. This has contributed to a polarization of jobs into higher-paying and lower-paying occupations in Canada, Ontario and most advanced economies.⁴

There is much speculation on what the current trends in technological progress will mean for the future of work. A recent publication discusses the growth of virtual work⁵ and its possible ramifications.⁶ Others speculated on scenarios that include further automation and a quickening pace of disruption where routine, administrative and service-oriented jobs are most likely to be affected.⁷ The publications stress the threat these changes will have on the standard employer–employee relationship and the implications for social safety net programs.

While change is happening, as the publications note, no one knows the magnitude or the pace of the changes that are coming. The data currently available suggest that the changes have not yet had a noticeable impact on broad labour market statistics. For example, the rise of virtual work is predicted to lead to an increase in self-employment and the growth of the gig economy⁸ is predicted to lead to an increase in part-time employment. However, neither part-time employment nor self-employment has grown faster than total employment for the past two decades (see Chart 3.12).

It should also be noted that widespread negative effects of automation on jobs are not apparent in the unemployment rate or in productivity statistics. In fact, measured economic productivity has grown very slowly over the past decade, suggesting that the pace of change with respect to automation has not been as rapid as is supposed.⁹ Also, to the extent that labour force growth will slow due to population aging, automation and increased productivity will help with the adjustment.

There is widespread fear of automation and robots displacing workers and various studies provide estimates of the number of jobs at risk from these trends.¹⁰ It is difficult to know what to make of these estimates, as the labour market is continually evolving and there is constant turnover every year as people enter and leave employment, and new jobs are created and others eliminated. For example, in Ontario in 2016, about 600,000 people aged 25 to 64 started a new job, while about 320,000 lost their jobs.¹¹ About 100,000 people left employment because of illness or disability or for other endeavours such as education or retirement. Over the 2003 to 2013 period, the hiring rate of adults aged 18 to 64 in Ontario averaged 18.4 per cent, while the layoff rate averaged 4.7 per cent.¹² While the studies focus on the number of people at risk of losing employment, they have little to say about the large numbers who will find new opportunities.

Instead of focusing on jobs that are at risk of elimination, the Organisation for Economic Co-operation and Development (OECD) concentrated on tasks that may be automated and occupations transformed by the changes. In doing so, the OECD found that only nine per cent of jobs in Canada are at risk due to automation.¹³

Economic Growth and Measures of Well-Being

Economic growth has long been used as a proxy measure for well-being because of a historical link between per capita GDP and living standards as measured by real wages or middle incomes. The link appears to have weakened over the past three decades as economic growth has continued to trend upward but living standards appear to be lagging, as illustrated in Chart 3.4. Since 1976, real per capita GDP has grown by 57 per cent while real median adjusted after-tax income has grown by roughly half that amount.¹⁶ For Ontario and for median adjusted income, the divergence appears to have started in the early 1990s.

The divergence appears to be due in large part to globalization and technological advances that are reshaping society and the nature of employment. The technological changes are reducing the demand for employment that is automatable, while also increasing the labour supply by facilitating globalization. At the same time, the changes are increasing demand for high-skilled employment and creating more winner-takes-all types of markets. This has led to higher wages and labour incomes for top earners and flatter income growth or stagnation for middle and low earners. The result is that the link between economic growth and living standards is much weaker today than in the past.

It has also become clear that society values many dimensions that are not well captured by economic growth, such as health, education, the environment and safety. A number of organizations have published measures of well-being that incorporate these and other important dimensions.

A recent study from the Canadian Index of Wellbeing is one example. It shows that the divergence between economic growth and living standards is happening for broad measures of well-being and that the divergence appears to be continuing today.¹⁷ From 1994 to 2014, per capita GDP in Canada rose by 38.0 per cent but the study’s index of well-being measure only grew by 9.9 per cent over the period. According to the study, some of the reasons for this divergence are the rise of non-standard work and worries about rising costs, such as for affordable housing and tuition.

Another recent study, from the Institute for Competitiveness and Prosperity, compared Ontario to 10 peer jurisdictions around the world on 11 different dimensions of well-being.¹⁸ It found that Ontario excels in several areas, particularly health, safety and access to services, but lags peer jurisdictions in income growth and jobs. Overall, Ontario ranked fifth highest on the composite well-being measure, relatively stronger than its economic growth performance.

The importance of employment to an individual’s quality of life is highlighted in the various measures of well-being. Work not only enters the measures directly as one of the dimensions, but also affects other dimensions such as income, housing, leisure time and community. Work has been changing due to various related pressures on product and labour markets and on employers, as noted in the previous section.

Shifting Industrial Composition

The industrial composition of Ontario and most other advanced economies has undergone major shifts over the past few decades. Industries that were structured for manual routine work, primarily in goods-producing sectors such as manufacturing, have declined. Industries that require non-routine work have expanded. These are mostly in service sectors and tend to be either high-skill jobs involving problem-solving abilities or lower-skilled, non-routine manual jobs. Goods-producing industries in Ontario represented 35.4 per cent of total employment in 1976, a figure that has fallen to 20.3 per cent in 2016. The share of manufacturing alone has decreased by more than half, falling from 23.2 per cent of total employment in 1980 to 10.7 per cent in 2016.

In contrast, the service sector has expanded from 64.6 per cent of total employment in 1976 to 79.7 per cent today. Service industries, such as professional, scientific and technical services, business, building and other support services, health care and social assistance services, and accommodation and food services, grew the most from 1976 to 2016.

Historically, goods-producing industries provided above-average pay and were more likely to be unionized and protected by tariffs. They were also more likely than service-sector jobs to provide other types of compensation such as health benefits and pension plans. These industries tended to employ people with high school education or less and trained them within the firm. Together with the above-average pay and benefits, they offered an attractive source of employment for less educated workers.

The decline of employment in goods-producing sectors and the growth in the service sector is a factor in a declining share of unionized employees. The unionization rate in Ontario declined from 35 per cent in 1981 to 25 per cent in 2016. The overall downward trend is due entirely to unionization declines in the private sector. The public-sector unionization rate increased from 66 per cent in 1981 to 69 per cent in 2016, whereas the private-sector unionization rate in Ontario declined from about 29 per cent in 1981 to 13 per cent in 2016.¹⁹ About 40 per cent of the decline is due to the shift from industries and occupations that were relatively highly unionized to ones that are not, such as from manufacturing to professional, scientific and technical services.

The growth in service sector employment has also resulted in a declining share of employees with non-wage compensation such as health benefits and pension plans.

Changing Occupational Tasks and Skill Requirements

The competitive economic pressures on employers and the labour market have brought related changes to occupations and to the skill and task requirements of jobs. From 1987 to 2016, total employment in Ontario increased by 43 per cent, but there is substantial variation among occupations. Broad occupational groups that have grown significantly faster than the overall average over the period include natural and applied sciences and related occupations (120 per cent); health (122 per cent); education, law and social, community and government services (107 per cent); art, culture, recreation and sport (101 per cent); and sales and services occupations (59 per cent). Occupations that have grown significantly slower than average include trades, transport and equipment operators and related occupations (9 per cent); natural resources, agriculture and related production occupations (14 per cent); and occupations in manufacturing and utilities, which actually decreased by 20 per cent over the period.

Occupations can be classified into routine tasks that are, in principle, automatable, and non-routine tasks that are not as easily automatable. They can also be separated into manual and cognitive tasks. The former mainly constitutes relatively lower-skilled, lower-paying occupations, whereas the latter comprises higher-skilled, higher-paying occupations.^{20, 21}

The loss of employment in goods-producing industries, particularly in manufacturing, has meant the loss of many middle-skilled, routine occupations. The growth of service-sector employment has resulted in the creation of employment in high-skilled occupations requiring abstract thinking and problem-solving abilities and in lower-skilled occupations involving personal, face-to-face interaction.

The implications for the Ontario labour market can be seen in Chart 3.9. Since 1987, employment in non-routine cognitive occupations has increased by 94 per cent and employment in non-routine manual occupations has risen by 64 per cent. In contrast, employment in routine occupations has grown by only 13 per cent.

This development has shifted employment shares of each category in Ontario’s workforce. Routine occupations constituted about 59 per cent of the labour force in 1987; by 2016, this share had declined to around 47 per cent. The employment share of non-routine cognitive jobs, in contrast, rose from 31 per cent in 1987 to 42 per cent in 2016. Non-routine manual jobs increased from 10 per cent in 1987 to a total of 11 per cent in 2016.

Employment by Skill Level

Another way to assess the changes to the labour market is to examine occupations by skill level. The federal department of Employment and Social Development Canada classifies all occupations into five skill levels:²²

• Skill level A (management) comprises management, which usually requires a university degree;
• Skill level A (professionals) comprises professionals, which usually requires a university degree;
• Skill level B is composed of people with a college diploma, apprenticeship or similar type of training;
• Skill level C includes high school graduates or people with specific on-the-job training; and
• Skill level D includes people with on-the-job training.

Chart 3.10 shows the breakdown of employment into the five skill categories. Since 1987, skill level A has had the highest employment growth — growing by 145 per cent. Skill level B was the next fastest, growing by 42 per cent. The lower-skilled occupations C and D grew by about 12 per cent and 35 per cent, respectively, over the same period. The skill level A (management) category grew by 26 per cent over this period. Skill level A (professionals) was the only category to increase its relative size, from 13 per cent of total employment in 1987 to 22 per cent in 2016.

Wages Rise with Skill Level

Wages rise with increasing skill level. In 2016, the highest average hourly wage was in skill level A (management), at $44.10 per hour, followed by skill level A (professionals) at an average of $37.00 per hour, while the lowest was in skill level D at $14.60 per hour. Real wages grew fastest in the higher-skilled categories — particularly in skill level A (management) categories — and slowest in the lower-skilled categories. This has contributed to increasing wage inequality. It is also a sign that labour demand for high-skilled workers grew faster than supply despite the large increase in skilled workers over this period. Ongoing technological progress suggests that this trend will likely continue into the near future. Wages in the lowest-skilled categories (skill levels C and D) were flat or fell. Part of this is likely due to the decline of routine jobs in goods-producing industries, while part is due to the supply of workers at these skill levels growing faster than the demand for these workers.

Shift to Alternative Forms of Employment

Over the past four decades, there has been a shift from primarily full-time, permanent paid employment with a regular schedule — often called standard employment²³ — to alternative forms of employment including part-time jobs, temporary work, multiple jobs and self-employment. For many Ontarians, these forms of employment mean irregular hours of work and uncertain pay. There is concern that some of these jobs are of much lower quality than standard jobs.

These changes can be seen in Chart 3.12. Part-time employment in Ontario increased from 13.5 per cent of total employment in 1976 to 19.0 per cent in 2016. Over the same period, self-employment grew from 10.5 to 15.7 per cent and the share of multiple job holders more than doubled from 2.2 to 5.4 per cent. Temporary employment increased from 4.7 per cent in 1989 to 10.7 per cent in 2016.²⁴

The increases in most of the components occurred before 2000, and their shares of total employment have since stabilized. An exception is temporary employment, which continued to increase in share until about 2005 but has remained flat since then. These alternative forms of employment currently comprise about 40 per cent of total employment in Ontario.²⁵

Some employees in alternative employment would undoubtedly prefer a more traditional standard relationship with their employer. However, there are also people who prefer alternative employment and benefit from the availability and choice of such employment. Unfortunately, no data are available on these preferences.

Rise of Non-Standard Employment

Some alternative employment does not have an ongoing full-time connection to the employer and may have irregular or uncertain hours with irregular or uncertain pay. This section presents estimates of the subset of alternative employment that are either considered undesirable by the employee or have elements of precariousness. Such employment is called non-standard in this document.²⁶

Non-standard employment is not easy to measure since existing surveys do not collect information on many of the potential dimensions. Given the constraints of current surveys, non-standard employment here is defined as temporary employment, which includes contract, seasonal, casual and other temporary jobs, involuntary part-time employment, self-employment without paid help and lower-wage, multiple job holders.²⁷

Voluntary part-time employment is excluded in defining non-standard employment for several reasons. Voluntary part-time workers may work part time because they are in school, are semi-retired, are a secondary earner in the family, or care for children or an elderly person. Women, in particular, are disproportionately in these situations. If the conditions were changed, for example, and if more affordable child care were available, then they may prefer to obtain full-time employment. By contrast, other people in part-time employment indicate that they want and are able to work more hours. These workers are included in non-standard employment, as they would prefer full-time employment that is not currently available to them.

The share of employees with multiple jobs has more than doubled over the past 25 years, from 2.2 per cent of total employment in 1976 to 5.4 per cent in 2016. The concern is that multiple job holders need to have two or more jobs to make ends meet. At the same time, there are more highly skilled professionals in demand who take on multiple jobs. As the concern is for the former group, multiple job holders are included in the definition of non-standard employment if their wage is below the median wage.

Applying this definition and using Statistics Canada’s Labour Force Survey, a consistent series on the trend in non-standard employment is presented for the 1997 to 2016 period (see Chart 3.13). Non-standard employment increased from 23.1 per cent of total employment in 1997 to 26.4 per cent in 2016, with most of the increase due to a rise in temporary employment.

Most of the rise in non-standard employment occurred before 2005 and the trend has been flat at about 26 to 27 per cent since 2009. This may mean the labour market has stabilized and reached equilibrium, where roughly one-quarter of all new jobs created are non-standard. Alternatively, there may be other forms of non-standard employment that are growing and are not currently being measured properly.

Increasingly Diverse Workforce

The Ontario workforce has become more diverse over the decades, a trend that will continue in the future. Population aging, the role of women, immigration and the employment of people with disabilities have transformed the workforce and will continue to do so.

Older Workforce

Population aging is working its way through the labour force and is leading to a more mature, older workforce. There are signs that older workers are continuing to work longer than they did in the past. For example, the labour force participation rate of Ontario seniors has more than doubled, from 6.7 per cent in 2000 to 14.4 per cent in 2016. Both senior males and females increased their participation in the labour market, as seen in Chart 3.14. The median age of retirement in Ontario has increased from 61.1 years in 2000 to 64.8 years in 2015.

To the extent that seniors prefer more flexible hours and autonomy, it could mean growth in part-time work, self-employment and other alternative forms of employment. Retirement of the baby boom generation will mean more opportunities for labour market entrants.

Women and the Labour Force

The dramatic rise in women’s labour force participation over the past few decades — from 57.4 per cent of women aged 25 to 54 in 1976 to 80.8 per cent in 2016 — has boosted labour force growth and contributed to greater opportunities and financial autonomy for women. While this growth appears to have reached a plateau, women’s roles in the labour market continue to evolve. The percentage of women (25 years and over) with a university degree has converged to that of men, and more women (ages 15 to 24) are enrolled in university today (55 per cent) than men (45 per cent).²⁸ Though progress has been made, women continue to be paid less than men, on average, and women are greatly underrepresented in senior management ranks and at the board level.

The increased participation of women in the labour market has resulted in more dual-earner couples, where both partners spend time in paid employment and unpaid work such as caregiving. This change in the division of paid and unpaid labour has highlighted the challenge of juggling work and family responsibilities, particularly for families with young children where the time and cost of providing care can be high.

Immigrants

Ontario has one of the most diverse populations in the world because of the high numbers of immigrants and temporary residents that the province has historically attracted, and this trend is likely to continue. The origin of the majority of immigrants has shifted over time from Europe and the United States to Asia. In 2015, the top four source countries for Ontario immigrants were India (19 per cent), the Philippines (17 per cent), China (7 per cent) and Pakistan (7 per cent).

The increased diversity in the workforce is a source of strength connecting Ontario with the world but it also poses challenges in terms of information requirements and understanding rights and responsibilities.²⁹ This is a particular concern given that many recent immigrants find themselves in non-standard jobs.

Recent immigrants have also had trouble integrating into the labour market and tend to have higher low-income rates. The 2016 unemployment rate of immigrants (arriving in the past five years) was 11.4 per cent, nearly double the rate of those born in Canada (6.3 per cent). The 2014 low-income rate³⁰ for recent immigrants was 34.7 per cent, about three times higher than the overall rate of 13.2 per cent.

For more information on the ways that the Ontario government helps qualified immigrants move into the labour market, see Chapter I: Demographic Trends and Projections.

Youth

Some youth have been delaying entry into the labour market. For many, this is due to acquiring more education and training. This is a positive trend, as the labour market is generating high-skilled jobs. However, some youth are not in employment, education or training (called NEET). In Ontario, the youth NEET rate for 15- to 29-year-olds was on a general downward trend, decreasing from 16.2 per cent in 1976 to a low of 9.9 per cent in 1999. The rate increased again to 11.1 per cent in 2016, likely due in large part to the recent recession. The disappearance of many routine jobs has made it more difficult for youth and other labour market entrants such as recent immigrants to find employment.

Impacts on Working Ontarians

For many Ontarians, a more globalized economy has created new opportunities for highly skilled workers and those who benefit from the growing availability of alternative work arrangements. For many others, however, these labour market changes have led to lower and less predictable earnings, reduced access to employer-provided benefits and increased strain on workers and their families.

Changing Schedules and Pay Practices

Intense competition in the product markets for new and improved goods and services is putting pressure on employers to speed up delivery and respond more quickly to changes in demand. To meet fluctuations in demand, employers have created more flexible workforces with a core group of permanent employees and peripheral group of contingent workers, independent contractors and part-time workers. For example, part-time work alone increased from 13.5 per cent in 1976 to 19.0 per cent in 2016.

There has also been a change in pay practices over the decades as employers have made greater use of arrangements such as stock options, bonuses, pay for performance and other forms of compensation.³¹ This has contributed to widening inequality and is likely one of the drivers of the wedge between per capita GDP growth and wages, incomes and other well-being measures.

Increase in Low-Income Workers

Since the 1990s, the number of working Ontarians with incomes below the low-income measure (LIM) has increased. In 2014, 644,000, or 9.0 per cent, of employed Ontarians were in households with incomes below the LIM; this was up from 5.9 per cent in 1996. There is a large difference by type of worker. The low-income rates of non-standard workers are three to four times those of standard workers. Though volatile, it appears that the low-income rate series is trending upward for non-standard workers, while the trend is flatter for standard workers. For the working poor, low pay rates or insufficient hours, or both, make it difficult to earn adequate income from employment and manage work-related costs such as child care.

Decline in Access to Employer-Provided Health Benefits and Pension Plans

The changes in the labour market over the last two decades noted above have been accompanied by a decrease in access to employer-provided health benefits and workplace pension plans.

Access to employer-provided health benefits varies substantially according to employment characteristics — large firm size, higher wages, full-time status and unionization are all correlated with a greater likelihood of coverage. As Chart 3.16 shows, workers in non-standard employment are considerably less likely to have access to employer-provided benefits. For example, in 2011, only 23 per cent of non-standard workers had employer-provided medical insurance or health plans, compared to 74 per cent of standard workers.

Workplace pension plan coverage has also declined in Ontario, from 42 per cent of workers in the early 1990s to 34 per cent today, mainly due to reduced pension coverage in the private sector. As with health benefits, non-standard workers are less likely than workers in standard employment to have pension coverage. In 2011, among Ontario workers without workplace pension plans, about one-quarter held multiple jobs and about one-quarter were employed part time. By comparison, among Ontario workers with workplace pension plans, only about one-tenth held multiple jobs and about one-tenth were employed part time.³²

There has also been a move away from defined benefit to defined contribution pension plans, particularly in the private sector. Between 1976 and 2015, the share of all workers in Ontario with defined benefit plans fell from 39 to 23 per cent. At the same time, the share of those with defined contribution plans increased from three to six per cent. A change from defined benefit to defined contribution plans shifts investment risk and other risks to employees, which can have significant implications for the security of workers’ future retirement incomes.

These factors have made saving for retirement more challenging. Recent analysis conducted jointly by the federal, provincial and territorial governments found that, without further action, about one-quarter of Canadian families will not have sufficient savings to maintain their standard of living in retirement. The same study found that about half of middle-income Canadian families without workplace pension plan assets are at risk of undersaving for retirement.

Access to Supports for Those Who Lose Their Job

A number of studies have noted that Canada’s long-standing social safety net programs, such as Employment Insurance (EI), are not well aligned with the changes in the labour market.³³ Employment Insurance was established in the 1940s to provide income support and training opportunities for Canadians who experienced periods of unemployment. However, the program currently fails to provide support to most unemployed Ontarians. Non-standard workers, such as those who work part time, hold multiple jobs or work contract to contract, often do not qualify for EI regular benefits. Overall, only about 29 per cent of Ontario’s unemployed are able to access EI regular benefits, compared to an average of 44 per cent in other provinces (see Chart 3.17).

Lack of access to EI regular benefits also means less access to EI-funded training programs as most of these are available only to active or former EI recipients.

Workplace Safety

The major employment trends identified above, including the growth of alternative forms of employment, have led to changes in the employer–employee relationship. They have also led to growth in the number of independent contractors and other forms of self-employment, and it is important that all workplace parties are aware of their rights and responsibilities under provincial occupational health and safety legislation. The workplace health and safety system must also be responsive to the changes that are occurring to the nature of work.

Despite the challenges created by the changing workplaces in the province, progress in workplace safety is ongoing and continued improvement remains a priority. As a result, Ontario is seeing fewer workplace injuries. The reported injury frequency rate per 100 workers of assessable employers has decreased from 2.37 per cent in 2000 to 0.85 per cent in 2015.

Ontario also has the lowest reported injury frequency per 100 workers of assessable employers compared to all other provinces and territories.³⁴

Strategies to Respond to the Changing Nature of Employment

Faced with wide-ranging changes in the labour market, programs and services are adjusting to ensure that individuals have continued opportunities to participate in the economy and achieve their full potential. The government is working to create the conditions and supports that workers and businesses need to compete in the global economy, while providing a strong social safety net for all Ontarians, no matter their stage in life.

Changing Workplaces Review

The significant changes in the workplace that have occurred over the past several decades have highlighted the need to better protect workers while supporting business. Ontario established the Changing Workplaces Review and appointed two special advisors to engage with Ontarians on how best to modernize the Province’s labour and employment laws in today’s changing economy. A final report with recommendations is expected in 2017.

Access to Affordable Child Care

Access to affordable, quality child care is key to supporting workers’ ability to fully participate in employment. The lack of affordable child care may be leading some parents to withdraw from the labour market or work part time when they would otherwise prefer to work full time. Since women are more likely to reduce their hours of work to care for a child, lack of access to affordable child care is also a factor contributing to the gender wage gap.

Ontario is already taking steps to build a high-quality, accessible and affordable early years and child care system that supports choice and flexibility for parents and promotes healthy development for children. Full-day kindergarten has been available to every four- and five-year-old in Ontario since September 2014. Ontario is also putting in place a renewed and coordinated system of Ontario Early Years Child and Family Centres and is working with the federal, provincial and territorial governments on a national early learning and child care framework.

Minimum Wage

An important tool to help low-income workers is the minimum wage. The government has helped low‐wage workers and families by raising the minimum wage by 66 per cent since 2003. Annual adjustments to the minimum wage are now tied to inflation. This gives businesses time to plan for any increases.

Income Security Reform and Innovation

Structural changes in the labour market are reducing the ability of some workers to earn adequate incomes from employment and are leading to a greater share of workers in unstable employment with less secure incomes. One approach to address this challenge could be to enhance in-work supports for lower-income workers. In-work supports have the potential to provide greater income stability for those with inadequate and fluctuating employment income.

Canada and Ontario have already taken steps to provide supports to low- to middle-income families through the federal Canada Child Benefit and the Ontario Child Benefit. These benefits help supplement the incomes of eligible families with children, including those families who are working.

Another approach, proposed by many experts and the government of Ontario, would be for the federal government to significantly enhance the Working Income Tax Benefit (WITB). The WITB provides support to low-income working Ontarians, and is particularly important for workers without children who are not eligible for children’s benefits.

Ontario is also moving forward with a Basic Income Pilot, announced in the 2016 Budget, that will test whether a basic income would provide more consistent and predictable income support in the context of today’s labour market. The pilot will help inform a multi-year plan for social assistance reform in the context of the broader income security system.

Innovative strategies may also be needed to ensure that families can access drug or other health benefits when these benefits are not available through their employer. Studies have shown the challenges that some low-income working families face in paying out of pocket the costs for prescription medications.³⁵ To address these concerns, several observers have called on the federal government to work with provinces to establish a national prescription drug plan.

When workers lose their jobs, it is important that they can access income supports and training programs to help them get back on their feet quickly. That is why Ontario provides a number of employment and training services through Employment Ontario and the social assistance system. However, as discussed earlier in this chapter, many unemployed workers in Ontario are unable to access federal EI benefits and EI-supported training, including some programs offered by Employment Ontario.

The federal government has recently made improvements to EI that will make it easier for new entrants to the labour market, including youth and recent immigrants in Ontario, to be eligible for EI benefits if they become unemployed. However, a comprehensive review of the EI program is still needed to consider further reforms that would better align it with the changing labour market. This review should consider program innovations, including the potential to pilot a wage insurance plan, expand existing provisions to better support multiple job holders, and test new forms of assistance for individuals in non-standard employment who typically are ineligible for EI regular benefits if they become unemployed.

Inclusive and Effective Training

Ontario is continuing to invest in employment transition supports to help Ontario workers find jobs in the rapidly evolving economy. The government recognizes that there are concerns among Ontarians about their place in the new economy and the challenges they face. The Province is working on measures to address these concerns, now and in the future.

The Province invests more than $1 billion each year in employment, training and labour market programs and services through Employment Ontario, which serves more than one million Ontarians, including youth, people with disabilities and seniors.

Additional investments are also made in the social assistance system to provide a range of services that help people who may face greater barriers to employment and need more life stabilization supports and pre-employment services as part of their employability journey.

In recognition of Ontario’s youth employment challenges, the Province maintains its focus on providing employment supports for youth. In 2013, Ontario introduced the Youth Jobs Strategy and renewed it in 2015, with an additional investment of $250 million over two years, to help more young people find jobs and ensure employers can hire the skilled workers they need to thrive in the evolving economy.

In 2016, Ontario announced the transformation of the Ontario Student Assistance Program and the introduction of the Ontario Student Grant (OSG). In addition to making funding more predictable, the OSG will make average college and university tuition free for students from families with incomes under $50,000.

Ontario also provides specialized employment supports for people with disabilities. For instance, Ontario Disability Support Program Employment Supports provide training, employment search, job coaching and other employment supports for people with disabilities. In 2016, Ontario committed to developing a provincial employment strategy for people with disabilities that will help ensure Ontarians have access to a continuum of employment and training services.

The Province is also continuing to modernize, transform and integrate employment and training programs and services across government to make it easier for Ontarians to find the employment support program they need. As part of the transformation, the government launched SkillsAdvance Ontario in fall 2016, a sector-focused pilot matching qualified job seekers with employers in relevant sectors. This program will help skilled Ontarians better navigate the current economy, where the nature of work is changing.

Improving Workplace Health and Safety

Workplace health and safety programs address the well-being of employees as they perform their jobs.

The Occupational Health and Safety Act provides the legal framework and the tools to achieve healthy and safe workplaces. It sets out the rights and duties of all parties in the workplace. It also establishes procedures for dealing with workplace hazards and provides for enforcement of the law where compliance has not been achieved voluntarily by workplace parties. The government’s workplace health and safety efforts also focus on prevention through the Chief Prevention Officer.

The Ontario government continues to make advances in workplace health and safety. In addition to a number of regulatory amendments, nearly all of the high-priority recommendations of the 2010 Expert Advisory Panel on Occupational Health and Safety have been implemented, including mandatory awareness training that focuses on the health and safety rights and responsibilities of workers, supervisors and employers, and through the implementation of training requirements for working at heights. Enforcement of the Occupational Health and Safety Act continues to focus on the most vulnerable workers by, for example, targeted workplace inspections for new and young workers.

The government has also implemented a prevention-focused strategy to address Post-Traumatic Stress Disorder (PTSD) for first responders such as police, firefighters and paramedics. This strategy is focused on increasing awareness about PTSD among first responders, ensuring that employers have access to resources to improve mental health supports for first responders, promoting research that supports the prevention of PTSD and holding an annual leadership summit.

To respond to PTSD in the workplace, the government passed the Supporting Ontario’s First Responders Act (Posttraumatic Stress Disorder), 2016, which amended the Workplace Safety and Insurance Act, 1997, and the Ministry of Labour Act. The amendments provide a presumption that PTSD diagnosed in first responders, as identified in the legislation, is work-related. This allows for faster access to Workplace Safety and Insurance Board benefits, resources and timely treatment.

Strengthening Retirement Security for Today’s Workers

As noted earlier in this chapter, the decline in participation in workplace pension plans, along with increasing longevity, will make it more difficult for today’s workers to save enough for a comfortable retirement. These changes also mean that most workers are required to manage their own savings, which involves making complex investment decisions and understanding longevity risk.

Addressing this challenge requires a multi-faceted strategy that includes enhancing financial literacy and strengthening consumer protections to ensure that individual savers can obtain sound, unbiased investment advice and get clear information on fees associated with different investments. The strategy also includes expanding access to retirement savings vehicles, particularly for workers in non-standard employment, and strengthening and modernizing existing workplace pension plans.

Ontario has already made significant progress on this multi-faceted strategy to improve retirement security. This progress includes achieving a historic agreement among federal, provincial and territorial governments to enhance the Canada Pension Plan. The enhancement will provide all workers, including those in non-standard employment, with a meaningful increase in future retirement income that will be predictable, paid for life and fully indexed to inflation.

To expand opportunities for retirement savings, Ontario has introduced pooled registered pension plans, an innovative savings tool intended to be low cost, professionally managed, and portable from one workplace to another.

For individual savers and investors, Ontario is working to enhance consumer protections by reviewing the regulatory framework for financial planning and advisory services. This includes examining ways to support workers with defined contribution plans to help them manage their investments and plan for their retirement.

Ontario will continue to take steps to modernize the regulatory framework for existing workplace pension plans, including reviewing the solvency funding rules for defined benefit pension plans, developing a framework for target benefit multi-employer pension plans and strengthening oversight.