Economist Examines Role of Wages and Housing in Bow Valley Employment

Finding and keeping employees remains a challenge for some Bow Valley businesses, but a University of Alberta economist says a lack of workers isn't necessarily the only problem.

Dr. Xingfei Liu, an associate professor in the University of Alberta's Department of Economics, says wages, hiring practices and living costs all influence whether employers can fill vacancies.

He distinguishes between a shortage of available workers and jobs that employers struggle to fill at existing wages and working conditions.

For Canmore business owner Jason Bantle, the challenges are tangible. His Bow Valley galleries previously employed six or seven people. Today, he says they struggle to maintain four.

Housing costs and employee turnover are among the difficulties he faces in recruiting and retaining staff.

What Is Driving the Worker Shortage?

Liu says labour shortages depend on both the number of available workers and employers' demand for them.

Rising operating costs have made some businesses more cautious about hiring, he said, particularly in hospitality and other service industries. Some employers have also divided work among more part-time positions to reduce expenses.

Meanwhile, immigration policies and population changes affect the supply of workers.

Liu cautioned against assuming every unfilled position represents a shortage. Employers struggling to attract applicants may need to reconsider wages, job requirements or working conditions.

He said persistent recruitment difficulties should generally put upward pressure on wages as businesses compete for employees.

"The market is dynamic," Liu told Bow Valley Insider.

However, he acknowledged that adjustments take time as employers respond to changing labour-market conditions.

Bow Valley Businesses Face Difficult Choices

Bantle, owner of All in the Wild Galleries, attributes his staffing challenges largely to housing costs and competition from restaurants, where employees can earn tips in addition to their wages.

He says his galleries pay above minimum wage, but raising wages further is difficult for a small business.

Bantle also receives applications from people outside the region who want to work in Banff or Canmore but have not secured housing.

"We get tons of applicants from, you know, all over the world who don't live in Canmore or Banff and want a job," Bantle said.

Before the COVID-19 pandemic, employees sometimes stayed with his galleries for four to six years. Now, many remain for only six to eight months.

As a result, Bantle and his wife have taken on more work at the galleries themselves.

Housing Remains a Major Barrier

Housing availability is another factor affecting recruitment in the Bow Valley.

The Town of Canmore estimates the community will need 3,400 additional affordable or below-market homes by 2041.

In April, Bow Valley Insider reported that Canmore-based Basecamp Resorts had 43 active job postings but was receiving fewer applications.

The company said approximately eight in 10 applicants asked about staff accommodation, which was often a deciding factor in accepting a position.

"Housing availability has a significant impact on our ability to recruit and retain staff," Basecamp said.

The Bow Valley Job Resource Centre has also identified housing availability and affordability as barriers to recruitment and retention.

Liu said workers facing high living costs may depend on employer-provided accommodation, family support or multiple jobs.

Bantle said purchasing property to provide staff accommodation is beyond what his business can afford. He believes greater access to subsidized employee housing could help smaller employers compete for workers.

How Does Immigration Affect Employment?

Liu disputes the idea that newcomers simply replace Canadian workers, noting that immigration affects both the supply of labour and demand for goods and services.

He explained that newcomers also contribute to economic activity through spending on housing, food and other necessities.

His comments come as federal immigration policies continue to change.

Recent restrictions have tightened access to the Temporary Foreign Worker Program. The general limit on low-wage temporary foreign workers is 10 per cent of an employer's workforce at a particular work location, although certain sectors have a 20 per cent cap and some positions are exempt.

Separate Express Entry changes taking effect Nov. 3 will award points for eligible Canadian work experience, with additional points for experience in designated high-wage occupations, or for qualifying job offers in those occupations.

The changes could improve permanent residence prospects for some skilled workers but do not guarantee an invitation to apply or remove Temporary Foreign Worker Program hiring requirements.

In Alberta's Oct. 19 immigration referendum, 54.86 per cent of voters provincewide supported the province seeking greater control over immigration.

The referendum was non-binding and does not automatically change federal immigration rules.

Can the Labour Market Adjust?

Liu said labour markets can adjust over time as wages and hiring practices change and workers respond to available opportunities.

He suggested governments could play a role in helping employers and workers navigate short-term barriers while those adjustments take place.

Bantle worries that staffing challenges could make it increasingly difficult for independent businesses to operate in Banff and Canmore.

He believes affordable housing and improved transportation from surrounding communities could help employers attract and retain workers.

"We're gonna slowly lose a sense of community," he said.