Thank you, Mr. Chairman. I'm going to make this statement.

Thank you for the opportunity to be here today.

There is no need to go into detail about the Business Development Bank of Canada, or BDC, which has 75 years of experience and has gained increased visibility since the start of the pandemic. However, I would like to remind you that the BDC is the only bank that is dedicated solely to entrepreneurs.

We are a Crown corporation which reports to Parliament through the Minister of International Trade, Export Promotion, Small Business and Economic Development. We operate as a lender and investor at arm's length from government. In this sense, we are a complement to private sector lenders rather than a competitor. This means we take more risk than other financial institutions and step in when the economy falters.

For instance, during the pandemic, we provided $2.8 billion in direct financial support as well as more than $4 billion in indirect support, working with financial institutions across the country. We also provide venture capital and advisory services.

It is in that latter context that I'm here. My economics research team supports, not only internal planning within BDC but also our clients, through regular publication of free reports and analysis to help them understand the economic context in which SMEs operate. These reports are framed as high-level observations about economic and market trends, coupled with practical advice for the entrepreneurs.

This labour shortage study builds on a similar study we did in 2018. These are some of the key observations, starting with demographic trends, that are well known but interesting to repeat.

The proportion of people aged 65 or more has increased from 13% in 2000 to 19% in 2021. Baby boomers are leaving the workplace, while the working-age population is growing at a slower pace. From 2000 to 2012, the labour force increased by 12%, but it's only expected to grow by 3.8% in the current decade and that number could even be lower. In other words, labour shortages are here to stay, especially in light of the expected demand for workers.

Layered on top of these long-term trends, the pandemic amplified the issue. Without COVID, there would be more than 440,000 more people in Canada. Immigration has declined by half because of COVID restrictions. The situation should resume in 2022. Further, 20% of workers who lost their jobs during the pandemic have changed fields of employment. As a result, the number of job vacancies has more than doubled since 2015, with the gap felt particularly in accommodation and food services as well as in manufacturing. These shortages have an impact on entrepreneurs, but there are actions they can take.

There are implications for limited growth, pressures on existing employees, compensation expectations and the ability to meet orders. The impacts are across the country, with businesses having difficulty hiring ranging from 29% in the Prairies to 67% in Ontario. Entrepreneurs have already adopted approaches to mitigate these pressures including 37% of entrepreneurs having adopted flexible work arrangements, 35% of them providing more internal training and 26% of them recruiting younger workers.

In addition to these tactics, our advice is that the following four proven strategies can help the most, given the recognition that labour shortages are a problem that's here to stay: first, use a formal hiring process; offer a competitive total compensation package; expand your hiring pool; and finally—and perhaps the most important advice that we give to businesses since the labour shortage will be here with us for quite a long time—invest in technology and automation. Our study is showing that technology adoption is the best strategy against the labour shortage.

Canadian businesses using automation are performing better and growing faster. Technology is now available for all sectors including services and retail. In that context, I want to highlight that BDC is pleased to contribute our efforts to the Canada digital adoption program, which was launched today by the Prime Minister and Minister Ng.

As part of stream two of CDAP, budget 2021 announced $2.6 billion for the Business Development Bank of Canada to help SMEs finance the implementation of their technology adoption plan. BDC will offer a 0% interest loan to improve productivity, better serve consumers and become more competitive.

Thank you for your attention. I hope this will lay a frame for a good discussion.

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