canada jobsCanadian Labour Market

High Levels of Immigration Critical to Canadian Labour Market, Research Shows

Published on: June 22nd, 2022

The Canadian labour market is critically dependent on high levels of immigration, according to a new study. The study, conducted by Statistics Canada, found modest, sustained levels of immigration will not be sufficient to offset the longer-term labour impacts of Canada’s aging population.

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As Canada’s post-pandemic economy continues to grow, employers are experiencing significant labour shortages. According to Statistics Canada, nearly 40 percent of businesses anticipated worker shortages in early 2022.

Record high job vacancies

According to Statistics Canada’s latest Job Vacancy report, the number of job openings across the country reached an all-time high of 957,500. This was an increase of 2.7% from the previous peak in the last quarter and over 80% above pre-pandemic levels. This was the highest quarterly number on record.

The latest figures also show that job vacancies continue to rise in the health care and social assistance sector. The number of vacancies in this sector increased by 5 percent from the previous quarter.

The health care and social assistance sector is growing rapidly due to the aging population. The shortage was further exasperated by the COVID-19 pandemic.

Job vacancies have also continued to rise to a record-high in the construction sector. Construction sector vacancies were up by 7.1% from the previous quarter, with 81,500 positions to fill.

Manufacturing and retail trade sectors also reached record-high vacancies, peaking at 87,400 in the manufacturing sector and 114,600 in the retail trade sector

Immigration as a solution

As Canada faces an acute shortage of skilled workers, many businesses struggle to find the right people to fill positions. To help address this problem, Canada has turned to immigration to fill record numbers of job openings.

Canada’s immigration minister announced new measures to help ensure Canada can recruit and retain the workers needed to keep the economy going. Among the measures included extending post-graduation work permits and resuming all-program Express Entry draws.

The government previously increased immigration targets in February 2022 in response to Canada’s growing economy. Canada may need to continue to increase immigration levels to keep up with demand.

Improved labour market outcomes for recent immigrants

Labour market outcomes for recent immigrants improved substantially in the years leading up to the pandemic. According to Statistics Canada, the employment rate for recent immigrants has increased by 8 percentage points since the early 2010s, while the earnings among recent economic immigrants rose by 39% percent.

In contrast, the employment rate for Canadian-born workers increased by just 2% for the same period.

The study’s authors say the improvements are likely due to a number of factors, including stronger economic growth in Canada and changes to immigration policies. The report found that the increased reliance on Temporary Foreign Workers (TFW) tends to improve the economic outcomes of immigrants. Programs like the Canadian Experience Class (CEC) and Provincial Nominee Programs (PNPs) typically invite candidates that are already working in Canada and are therefore more likely to succeed in the labour market.

As the economy continues to grow, there are not enough Canadians to fill the available jobs. Immigrants are vital to fill the gap and help to keep the economy strong.

 

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