Federal Budget 2026 needs to include developing and funding a $1.25-billion National Workforce Strategy to align workforce investments with Major Projects and Canada’s economic priorities, says Colleges and Institutes Canada (CICan).

Canada’s ability to deliver on its economic and nation-building commitments is constrained not by capital or approvals, but by workforce capacity and coordination, CICan said in a pre-budget submission. Pari Johnston (photo at right) is the president and CEO of CICan.

“Without improved alignment and capacity, federal investments will not deliver the workforce needed to support Major Projects and defence priorities,” CICan said.

Bottlenecks in training capacity, coordination and workforce supports prevent Canada’s talent pipeline from delivering the certified workers required, particularly as recent investments increase demand and widen entry pathways, according to the submission.

The 2026 Spring Economic Update estimated that over 1.4 million additional trades workers will be needed in Canada by 2033, and the national electricity strategy is expected to create 130,000 additional jobs by 2050, CICan noted.

Labour shortages – especially in skilled trades – are already impacting growth, with mismatches between labour supply and demand costing the economy $2.6 billion in 2024 and reducing productivity, the organization said. “AI is increasing the need to upskill mid-career workers and reskill displaced workers.”

“Canada requires stronger alignment between governments, employers and training providers to meet its nation-building goals,” CICan said.

This challenge is intensified by Major Projects with similar workforce needs and the rollout of $6 billion in skilled trades investments, which will require added system capacity and coordination to deliver results, the organization said.

Coordination gaps limit progress on structural issues, including unclear pathways for youth into high-demand careers, misalignment between workforce investments and regional needs, and barriers to labour mobility across jurisdictions, with 20 percent of trades sector employers reporting difficulty hiring from other provinces or territories.

These challenges are compounded by demographic pressures, rising training costs, evolving skill requirements and infrastructure constraints that are already creating waitlists across the training system.

Spring Economic Update investments to increase Canadian Armed Forces trades capacity will put further pressure on the system, CICan said.

A new National Workforce Strategy would align workforce investments – including those announced in the Spring Economic Update – with Major project pipelines and economic priorities, CICan said.

This strategy should coordinate efforts across governments, employers, training providers and unions, and extend beyond skilled trades to include supporting sectors required to deliver major investments.

Canada’s public colleges and institutes should be horizontal strategic partners in this strategy, “at the centre of local workforce development,” CICan said.

The new strategy requires an overall investment of $1.25 billion over three years. This level of investment reflects the scale required to ensure recent federal commitments to skilled trades – including for the Canadian Armed Forces and Major Projects – can be delivered without delay, the submission said.

The federal government should strategically partner with Canada’s public colleges and institutes to advance its priorities by:

• Investing $750 million over three years in a dedicated new capital funding stream for equipment and training spaces at public colleges and institutes, to address capacity constraints and expand training in high-demand trades and technical fields.

“Without this investment, federal training and apprenticeship commitments risk being constrained by insufficient physical capacity in the system.

• Investing $500 million over three years to work with the provinces and territories to strengthen workforce and training systems and operationalize commitments made in the Spring Economic Update.

In addition to alignment and investments in the skilled trades, this funding should support training institutions to help address labour shortages in other critical sectors which support the delivery and operations of Major Projects in remote regions, such as health care.

• Continuing to strengthen investments to improve access to postsecondary education for First Nation, Metis and Inuit learners in collaboration with the National Indigenous Organizations and institutions.
• Improving access for colleges to existing Tri-Council partnership programs to enhance industry-driven research and support project delivery.

Public colleges and institutes are well-positioned to be government’s training partner

Public colleges’ and institutes’ programs are developed directly with industry to align with labour market demand and emerging technologies, including AI, CICan noted.

Colleges can rapidly adapt programs and deliver short-cycle training, micro-credentials and upskilling opportunities as local workforce requirements evolve.

The sector is Canada’s primary apprenticeship trainer, providing high-quality and rapid in-school training in the regions hosting Major Projects.

CICan recommended that that the government strategically partner with Canada’s public colleges and institutes as a training partner in delivering technical skills, dual-use innovation, and upskilling of Canadian Armed Forces personnel transitioning out of service. The federal government can do so by:

• Reforming federal procurement systems to support agile training agreements, enabling colleges to contract more quickly by reducing barriers for agreements under $100 million.
• Expanding the Employment and Training Benefit by making Prior Learning Assessment and Recognition costs eligible under the Veterans Well-being Act. This would accelerate the translation of military training into civilian credentials, support faster workforce entry for veterans, and help address labour shortages.
• Investing $80 million over three years in an applied research and technology adoption stream through the federal BOREALIS (Bureau of Research, Engineering and Advanced Leadership in Innovation and Science), open to colleges, to accelerate dual-use technology adoption and strengthen defence innovation capacity in rural, remote and northern regions where colleges are the primary local research partners.

See also: Federal research funding requires overhaul to better support colleges’ applied research and incentivize collaboration

Build employer-connected training programs aligned with Canada’s national priority sectors and Major Projects

The not-for-profit Business + Higher Education Roundtable, in a separate pre-budget submission, also calls for building employer-connected training programs aligned with Canada’s national priority sectors and Major Projects.

Expand training programs that link learning, training and employment, and design them around employer needs rather than program silos, recognizing that employers often require integrated pathways for students, early-career hires, apprentices, newcomers and mid-career workers to meet evolving workforce demands, BHER recommended.

Ottawa should require major federally supported projects and sector strategies to include talent development and deployment plans that identify workforce needs, employer demand, regional labour supply, training pathways and measurable outcomes, and ensure these plans are coordinated across sectors and projects that may draw on similar talent pools, according to the submission.

Federal Workforce Alliances and the Strategic Workforce Innovation Fund should be focused on talent development and deployment outcomes, BHER said.

Prioritize projects that expand talent pipelines in national priority sectors, strengthen employer capacity to hire, onboard, train and retain talent, improve skills recognition and labour mobility, reduce fragmentation across the workforce development ecosystem, and generate real-time labour market intelligence.

Canada’s challenge is no longer only talent production, but talent deployment, whether new graduates, newcomers, apprentices and mid-career workers can move into priority roles quickly enough to meet national economic needs, BHER noted.

Graduates are not consistently transitioning into relevant roles at pace. Employers, particularly small and mid-sized companies, face ongoing constraints in finding, hiring, onboarding, training, and retaining talent.

Upskilling and reskilling pathways remain fragmented and slow to adapt. Skilled newcomers continue to face barriers to full labour market participation. Even among large employers, there is limited coordination in how talent is shared, developed, and deployed across major projects, sectors and regions.

Meeting this challenge will require stronger capacity to absorb and develop talent, alongside postsecondary institutions that can adapt and scale pathways aligned with evolving workforce demand, the organization said.

“Talent should therefore be treated as national infrastructure: strategically aligned with Canada’s economic priorities and deliberately connected to the projects, sectors, employers, regions and communities where execution capacity is needed most.”

Canada needs differentiated postsecondary institutions that can adapt to shifting labour market needs; faster and more responsive pathways into high-demand roles; stronger employer capacity to integrate and develop talent; and clearer alignment between workforce development and national economic priorities, BHER said.

“What Canada needs is a talent development and deployment system designed for responsiveness, coordination and scale.”

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