The Canadian trucking industry is vital to the country’s economy, employing around 400,000 people and supporting over 500,000 businesses. Trucking includes private fleets transporting goods for their companies and for-hire carriers handling goods for other organizations. Deemed an essential service during the COVID-19 pandemic, the trucking sector helped sustain supply chains as consumer demand shifted from services to goods, bolstering freight transportation needs.
In August, Immigration Minister Sean Fraser announced trucking as one of 16 new jobs added to the Federal Skilled Worker Program with the latest National Occupation Classification (NOC), aiming to address ongoing labour shortages in the industry. However, trucking companies are still struggling to fill vacancies, with looming retirements expected to exacerbate the issue. According to a 2019 report from Statistics Canada, 31 percent of male transport truck drivers were over 55, indicating a significant portion of the workforce nearing retirement.
Impact of Labour Shortages
The Conference Board of Canada estimated that labour shortages in the transportation and warehousing sector directly cost the economy over $1.3 billion in 2022, with the total economic impact exceeding $4.3 billion when considering indirect effects on other industries. Projections indicate that trucking labour shortages could range between 25,000 in 2025 and 55,600 by 2035, severely impacting the supply chain. Shortages are also anticipated in different transportation sectors, including aviation, marine, and rail.
The trucking industry plays a crucial role in the supply chains of various sectors, such as manufacturing, agriculture, and natural resources. “The acute shortage of truck drivers in Canada is felt beyond the trucking industry,” says Kristelle Audet, Principal Economist at The Conference Board of Canada. She emphasizes that trucking is the lifeline for critical industries like forestry, auto manufacturing, and retail.
Despite the growing need for drivers, companies face a recruitment challenge. Mike Zelek of Wellington Motor Freight pointed out that the trucking industry is not seen as a viable career by many, and efforts to combat the shortage have been insufficient. In 2021, Canada faced a shortage of around 20,000 truck drivers, requiring the hiring of 17,000 drivers annually until 2025 to keep up with demand and avoid further supply chain disruptions.
Root Causes of the Shortage
Several factors contribute to the driver shortage, including difficult work conditions, long hours, and a lack of respect for the profession. Truck drivers are often paid by the kilometre, with no compensation for delays during loading or unloading, leading to unpredictable incomes. Truck drivers’ annual salary is around $50,000, while long-haul drivers earn closer to $63,000. However, risks associated with long hours on the road, handling heavy loads, and carrying dangerous goods make the job even more challenging. The frequent time away from home and family further discourages potential candidates from pursuing trucking as a career.
Efforts are underway to mitigate the driver shortage. Government and industry leaders, including the Canadian Trucking Alliance (CTA), are working to attract new drivers by advocating for flexible schedules, competitive compensation packages, and access to immigration channels to tap into foreign labour pools. The province of Alberta, for example, has invested $30 million in driver training to address the shortage.
Supply Chain Challenges and Industry Outlook
As of June 2024, Canada had nearly 152,000 business locations in the truck transportation subsector, offering general and specialized freight services. The specialized trucking sector saw a price increase of 4.3 percent from 2023 to 2024, while general freight trucking experienced a slight decline of 0.5 percent. Despite fewer long-term vacancies, with only one in three job listings advertised for over 90 days, recruitment remains challenging. In the second quarter of 2024, more than three in five vacancies required constant recruitment.
Supply chain challenges continue to plague the transportation sector. In the third quarter of 2024, nearly one in five businesses in the transportation and warehousing sector expected an increase in demand for goods or services over the next three months. However, fewer than one in 10 expected to increase their workforce, indicating a persistent labour shortage. Moreover, over two in five businesses across all sectors reported worsening supply chain issues, with nearly half experiencing delivery delays.
The Way Forward
The shortage of truck drivers in Canada predates the pandemic, but retirements, a shrinking labour pool, and a lack of interest in the profession have exacerbated the problem. Addressing the driver shortage requires more than recruitment efforts; it calls for a re-evaluation of how drivers are compensated and respected. Zelek advocates for guaranteed wages and improved work-life balance as incentives to attract and retain drivers.
The government and trucking companies must strengthen their collaborative efforts to create a sustainable solution. Initiatives like enhanced driver training programs, improved compensation packages, and government support in cracking down on underground economies such as “Driver Inc” are critical. Driver Inc. drivers are company drivers paid “under the table” at a more competitive rate because no source deductions or other remittances are being paid, such as WCB, overtime, or other costs.
Respect for the profession, which performs a vital service to the Canadian economy, must also be restored. With these efforts, the industry can better cope with the demands of a rapidly evolving logistics landscape and maintain the supply chains crucial to the nation’s prosperity.
FAQ: Truck Driver Shortage and Labour Challenges in Canada’s Trucking Industry
Why is there a shortage of truck drivers in Canada despite the demand?
The shortage results from challenging work conditions, long hours, unpredictable income due to per-kilometre pay, and time spent away from home. These factors, combined with limited respect for the profession, discourage many from pursuing trucking as a career.
How does the truck driver shortage impact Canada’s economy?
Labour shortages in trucking affect the supply chains of essential industries, like agriculture, manufacturing, and retail. In 2022, transportation labour shortages cost the Canadian economy over $1.3 billion, with broader impacts estimated at $4.3 billion.
What are Canada’s initiatives to address the trucking labour shortage?
Government and industry are working together on solutions, including flexible schedules, competitive wages, and immigration programs to recruit foreign drivers. For instance, Alberta invested $30 million in driver training to tackle the shortage.
How does compensation affect truck driver recruitment?
The trucking industry traditionally pays drivers per kilometre, with no pay for delays. Advocates suggest shifting to guaranteed wages and improving work-life balance to make the career more appealing and retain drivers.
What role does immigration play in filling trucking vacancies?
Trucking was recently added to Canada’s Federal Skilled Worker Program to address shortages, making it easier for qualified foreign drivers to immigrate and fill job vacancies in the Canadian trucking industry.