Newcomers are the Answer to Canada's Rising Labour Shortages

As British Columbia and almost all the other Canadian provinces watch their employment numbers rise above pre-pandemic levels, the challenges of labour shortages loom large.

So what's the answer?

Well, as Ravi Kahlon, B.C.'s Minister of Jobs, Economic Recovery and Innovation, said this week, “We need to start getting those immigration numbers up."

The Covid-19 pandemic has definitely put a serious check on immigration and temporary foreign workers. It's also made it obvious that immigration remains central to Canada’s economic, creative and housing future.

Strong economic expansion is the forecast

The ripple effects of this dearth of newcomers impact many sectors.

Speaking at the recent Canadian Job Market Outlook for Newcomers summit held by Prepare for Canada, Scotiabank's senior economist Marc Desormeaux explained that "immigration played an essential role in the economic growth that we witnessed in Canada before the pandemic and we believe that it will play an important role in our recovery from the pandemic as well."

Desormeaux went on to say that Scotiabank sees "a very strong recovery this year and some strong growth into 2022." He also says they expect real GCP growth "north of 6 percent" which would be the strongest expansion in percentage terms since the 70s."

Statistics released Oct. 8 show Canadian employment returned to its February, 2020 level in September, increasing by 157,000

The unemployment rate fell to 6.9 per cent.

Desormeaux cites the reopening of the economy across the country, high vaccination rates (thus avoiding major shutdowns), and strong growth in the U.S. economy (which means strong growth in Canada) as the key factors that will drive such robust growth.

Recovery felt across the country

All this, Desormeaux says, means immigration is more important than ever to Canada's economy.

"Immigrants accounted for a majority, a strong majority, of the new full-time jobs created in the five years before the pandemic," he said, adding Scotiabank believes, in consensus with others, "that Canada is in a position for very strong growth this year as we reopen from pandemic lockdowns and that's a recovery that is expected to be felt across the country."

Immigration took a backseat to issues such as climate change, affordable housing and economic recovery

Interestingly, during the recent election campaign, immigration took a back seat to issues such as climate change, affordable housing, and economic recovery. Yet, both the Liberals and Conservatives promised to increase immigration, address the backlog in applications, and improve credential recognition.

Liberals promised to work with employers

Speaking to reporters in Russell, Ont. during the campaign, even CPC party leader Erin O'Toole, whose party finished second to the Liberals, said an economic recovery from the impacts of the COVID-19 pandemic requires "rising immigration" (though he didn't specify how many immigrants a Conservative government would welcome to Canada).

"We need increasing immigration to grow this country," O'Toole said.

Justin Trudeau's Liberal minority government expects to honour its long-term commitment to admitting high levels of immigration to support Canada’s post-pandemic economic recovery. They expect to continue reuniting families, helping refugees plus admitting other newcomers to Canada such as international students and temporary foreign workers.

Afghan refugee numbers doubled

The Liberals also said during the election that they will work with employers across the country to admit 2,000 skilled refugees to fill labour shortages in struggling sectors such as health care. Canada also announced it has doubled to 40,000 the number of Afghans it plans to take in. This fulfills a campaign pledge made by Trudeau.

Trudeau's Liberals also say they will support temporary foreign workers and Canadian employers by establishing a Trusted Employer stream that will streamline the application process. They also vowed to improve the flow of talent by simplifying permit renewals, upholding the two-week processing standard, and creating an employer hotline to allow companies to attract and hire workers.

It's also expected that the new Liberal government will gradually, throughout 2022, introduce new immigration policies and programs.

Right now, we're in bidding wars - Michael Ballingall

Still, Michael Ballingall, senior vice-president of Big White Ski Resort, lamented the labour shortage. He told Nelson Bennett of Business in Vancouver this week that his company “Right now, we’re in bidding wars.” He also criticized the state of immigration to Canada, which he described as “ slow, slow, slow...it's  just bogged down.”

In reality, the pace appears to be quickening. A little. 

New data from the IRCC

According to Kareem El-Assal of CIC News, Canada’s new immigrant landings remain high.

CIC, says El-Assal, obtained new data from Immigration, Refugees and Citizenship Canada (IRCC)  showing Canada admitted 37,780 new permanent residents in August. It's the third month in a row that this country's immigration levels were higher than usual.

In July, Canada landed nearly 40,000 new permanent residents and in June nearly 36,000. Before the pandemic hit, Canada welcomed between 25,000 and 35,000 new immigrants in a given month. Immigration levels fell significantly beginning in April 2020 following the implementation of COVID-19 public health measures.

Up until June of 2021, Canada’s new permanent resident landings were falling short of the numbers necessary to meet the country’s immigration target for 2021 of 400,000 newcomers.  Canada aims to welcome at least 401,000 new immigrants annually starting this year.

We have a low birth rate, an ageing population and fewer babies being born - Marc Desormeaux

The economic reasons again are obvious, says Desormeaux, and are long-term. The most fundamental reason that Canada needs immigration is that "we have a low birth rate, an ageing population and fewer babies being born. That reduces the size of the pool of workers available to produce goods and services and that limits our ability to expand."

Immigration is about our demographic picture

"So with that in mind, Canada needs skilled newcomers who are young who can come in and fill positions, who can come in and contribute to the economy for us to drive economic growth in the long run. This is fundamental.

"It's not just about the pandemic it's about our demographic picture. Canada needs immigration in order to sustain economic growth."

Desormeaux also pointed out the impact immigration and a booming economy will have on the housing and rental market. 

As Globe and Mail columnist John Ibbitson wrote following the election: "On immigration, Canada is on track to accept more permanent residents this year than at any time in its history, despite travel restrictions. The population becomes more diverse every year. Yet no major national party is calling for cuts to immigration levels."

Obviously, Canadian employers like Michael Ballingall are thankful for that.