Canadian small business owners find themselves caught in an increasingly challenging hiring environment as labour mobility barriers create substantial roadblocks in their search for qualified workers. Despite a national unemployment rate of 6.4% and over one million job seekers, businesses across the country report significant difficulties filling critical positions—a paradox that threatens economic growth in communities nationwide.
“We’ve had positions open for months with qualified candidates just a province away, but certification requirements make it nearly impossible to bring them on board,” explains Miranda Chen, owner of a specialized healthcare service in Halifax. “It’s as if we’ve created invisible walls between provinces that neither workers nor businesses can easily cross.”
The Canadian Federation of Independent Business (CFIB) recently highlighted that nearly 60% of small businesses cite labour shortages as their most pressing challenge. This situation stems largely from provincial regulatory differences creating what economists call “mobility friction”—unnecessary barriers preventing workers from moving where jobs exist.
At the heart of the issue are inconsistent professional licensing requirements across provincial boundaries. A dental hygienist certified in British Columbia may need to undergo substantial additional training or testing to practice the same profession in Ontario. Similarly, electricians, plumbers, and various skilled trades face certification hurdles that effectively trap them within provincial borders.
“We’re operating in a national economy with provincial barriers,” notes Dr. Marcus Williams, economist at the C.D. Howe Institute. “These regulatory differences weren’t designed to be protectionist, but that’s effectively what they’ve become. They’re preventing labour market efficiency at a time when businesses desperately need workforce flexibility.”
The economic impact extends beyond individual businesses. According to research from CO24 Business, these barriers cost the Canadian economy approximately $8.5 billion annually in lost productivity and economic output—a figure that continues to grow as population aging accelerates workforce shortages.
Federal and provincial governments have made repeated commitments to address these issues through various labour mobility agreements, including the Canadian Free Trade Agreement. However, implementation has been sluggish, with exceptions and carve-outs undermining progress toward a truly open internal labour market.
Small businesses in rural and remote areas face particularly severe consequences. “When we can’t fill positions, we can’t grow—it’s that simple,” says Jean Tremblay, who operates a manufacturing facility in northern Quebec. “We’ve had to turn down contracts because we simply don’t have the workforce to meet demand, despite knowing qualified people are available in other provinces.”
The situation creates a troubling disconnect in Canada’s economic landscape. While some regions struggle with unemployment, others cannot find workers for available positions. This mismatch undermines productivity and constrains economic growth precisely when post-pandemic recovery demands maximum efficiency.
Business advocacy groups are pushing for accelerated recognition of credentials across provincial lines, digital verification systems for qualifications, and standardized certification requirements in regulated professions. These measures would significantly reduce friction in Canada’s internal labour market.
“This isn’t just about business convenience—it’s about creating opportunities for workers and strengthening communities,” emphasizes Saanvi Patel, policy director at the Canadian Chamber of Commerce. “When someone qualified for a job can’t take it because of arbitrary regulatory differences, everyone loses.”
As Canadian politics continues to address these challenges, the question remains: In an era of global competition for talent, can Canada afford to maintain internal barriers that prevent workers from moving to where they’re most needed? The answer may determine whether small businesses can survive and thrive in the changing economic landscape.
