Shortage of service techs in Ontario 'worse than anyone ever expected,' report finds

A shortage of automotive technicians at Ontario new-vehicle dealers has reached a “crisis” level, a new report warns.

There were more than 3,000 vacancies in the automotive trades in the province at the end of the first quarter of 2023, according to the report entitled The Labour Market for the Automotive Trades in Ontario and the Impact on New Car and Truck Retailers. Prior to the pandemic there were approximately 1,500 vacancies.

Anyone working in the trade must be an apprentice or have a valid Certificate of Qualification. The five automotive trades that are compulsory are:

• Alignment and Brakes Technician
• Auto Body and Collision Damage Repairer
• Auto Body Repairer
• Automotive Electronic Accessory Technician
• Automotive Service Technician.

The report was commissioned by the Motor Vehicle Retailers of Ontario (MVRO), with support from the Canadian Automobile Dealers Association (CADA), and prepared by MNP LLP.

“Just about every new car and truck retailer I speak to can’t hire an automotive technician today,” MVRO Executive Director Todd Bourgon said in a statement. “We know there is a massive shortage of automotive technicians, and the problem won’t be solved overnight.”

Data shows the age distribution of automotive service technicians and mechanics in 2021 and 2016. 

Between 2016 and 2021, the number of technicians and mechanics in the 15-24 age group declined by two per cent and the number in the 25-54 age group declined by eight percent, while the number of technicians and mechanics aged 55 and over increased by almost 13 per cent, according to the report. 

“This indicates that the workforce is aging and that the number of people entering the occupation is not sufficient to replace those that will be retiring between 2022 and 2032,” the report said.

Bourgon said the study was needed to “get the facts to determine what needs to be done going forward.”

'CRISIS ON OUR HANDS'

“This study clearly demonstrates we have a crisis on our hands. This ground-breaking study will also help our members plan and navigate the service side of their business for the coming years.”

In the meantime, the shortage is costing dealers money. Depending on the hourly rate, which fluctuates by dealer, the estimated annual revenue loss of one technician vacancy is $429,600-$644,440, the study found. 

“Multiply that roughly half million dollars by the 3,000-person shortfall we have and that’s ugly,” Bourgon told Automotive News Canada.

In an effort to fill vacancies, dealers are turning to the federal Temporary Foreign Workers (TFW) program, but they say the process is costly and extends the timeline for hiring. It takes between 12 and 16 months to fill a position through the TFW program, due, in part, to the requirement to demonstrate that there is a lack of available workers locally through a Labour Market Impact Assessment (LMIA). Recruiting TFWs costs between $20,000 and $30,000 per recruit. Of that, between 20 per cent and 30 per cent of the costs are associated with the LMIA process.

“Eliminating the requirement for a LMIA could reduce the length of time it takes to fill vacant positions and increase access to labour for employers in the short-term as they undertake initiatives to attract more domestic workers to the industry,” the report said.

Adding to the problem is that MNP researchers found that even temporary foreign workers are forgoing a chance to work in Canada because the process is too cumbersome to navigate.

'MAJOR PROBLEM'

“In Australia and New Zealand, the process to recruit foreign workers takes significantly less time than in Canada,” the report said. “According to a recruitment agency in the Philippines, once an offer is made it can take less than four weeks to complete the process. In Canada, it takes an average of 10 weeks to process applications for TFWs from the Philippines, excluding the time needed to provide requested biometric information.”

Bourgon called the Canadian LMIA process “long, expensive and futile” because it never finds Canadians to do the job and always points to the need of TFWs.

Bourgon said the MVRO and CADA will now go to the federal government armed with this report and ask for help.

“We have a major problem, and we need you guys to start looking at [TFW] exemptions for our industry, like now,” he said. “This is worse than anyone ever expected.”

Bourgon said it's the first time "we’ve never done a report like this in our 115-year history. But everyone knew we had a problem because we’re recycling people by paying them more money and stealing them from other organizations and dealerships.

“And we’ve been recruiting out of country for a year and half.”