Various processes including globalization, technological and labour force changes as well as the application of new work practices have led to major changes in the occupational composition of the labour force and in the tasks and skills required of workers. Not only has the share of jobs requiring advanced skills increased, so too have skill requirements risen within job groups, including those with medium or low skill requirements.

Canada, like other OECD countries, has evolved into a knowledge-based economy – one that places a premium on literacy, numeracy and problem-solving skills which are now regarded as essential, or foundation, skills for many jobs in today’s labour market. But such skills are important not only from the point of view of the labour market, they are increasingly seen as important for an individual’s ability to participate fully in modern society.

Often we hear that solid progress is being made on the education front. Canadian fifteen-year-olds compare well to their peers in other countries on international achievement tests, progress is being made in the reduction of drop-out rates and Canadian rates of participation in postsecondary education are high compared to most other countries. However, recent results from the International Adult Literacy and Skills Survey (IALSS) show there is little room for complacency.^{Footnote 1}

The International Adult Literacy and Skills Survey tested more than 23,000 Canadians age 16 years or more in 2003 on their skills proficiency in four domains: prose, document, numeracy and problem-solving. Skills were rated on the basis of levels one to five, that is, lowest to highest. In Canada, about 42% of adults between the ages of 16 and 65 scored below Level 3 on the prose scale and about 50% scored below Level 3 on the numeracy scale. These individuals are likely to have difficulties coping with increasing literacy- and numeracy-related demands common in everyday life and work in a knowledge society and information economy.

The findings show that education has a strong and persistent effect on an individual’s skills over time. We also note, however, that though education is important, some individuals with low levels of educational attainment perform better than others who have more education. In Canada, one-quarter of individuals who had completed some kind of postsecondary education scored in the bottom 25% of individuals, while one-quarter of those with less than a high school education scored among the top 25% of individuals.

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