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Immigrants are set to have a bright future in Canada’s labour market

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The ageing of Canada’s population will benefit both native and immigrant employees.

The employment rate in Canada is at its peak.

Given the coronavirus pandemic, this may appear odd at first.

Even so, the enormous demographic trends that were reshaping Canada’s workforce prior to the pandemic and will continue to transform it over the next decade, there was little uncertainty that the labour market would rebound.

One of the most profound problems in terms of immigration policy is how a recession will affect the labour market performance of immigrants who receive permanent residence during times of economic crisis. According to research, such immigrants’ labour market outcomes may be adversely affected throughout the rest of their careers in Canada.

This is concerning, given the severe economic shock experienced by Canada at the outset of the pandemic, as well as Canada’s desire to welcome the biggest levels of immigration in its history.

However, a closer examination reveals that the COVID recession is distinct, and immigrants who have recently arrived or will arrive in the near future are still well poised in the Canadian labour market.

Four reasons for this present trend are mentioned below:

More Canadian workers retiring:

The exit of baby boomers from the Canadian workforce is the very first reason for this. This exodus explains why prior to the COVID recession, Canada had its lowest unemployment rate in history, despite the pandemic’s continued impact on the Canadian and global economies. It has attained another historic low in unemployment rate.

Around 20 million people work in Canada, with approximately 9 million of them being baby boomers. Within the next decade, all 9 million baby boomers will have reached the age of retirement in Canada, which is 65. As more workers retire, the Canadian labour market will become more void.

Historically, Canada has been able to completely replace retirees with new Canadian graduates who have completed their school and have entered the workforce, but this is no longer the case. Because of Canada’s low birth rate, it will have to rely on other sources of talent to replace retiring workers.

Replacing retiring workers is critical in maintaining the economy and ensuring that the tax base is large enough to provide services that Canadians can access, such as education and health care. This is increasingly more significant as Canada’s health-care spending rises as the population ages.

Women, people with disabilities, elderly employees, Indigenous peoples, and distracted youth are just a few examples of underutilised talent sources. Even if we raised their employment participation rates to the national average, adding more of them to the labour market would not entirely compensate for all the retirees.

This helps us to illustrate why immigration is so important to Canada’s economic growth. Prior to the pandemic, they accounted for up to 100% of Canada’s yearly labour force expansion in a few instances, and this is expected to become the norm over the next decade.

More competitive selection process:

In recent years, the federal government, as well as provinces and territories, have changed their selection criteria to account for human capital factors that have been shown in studies resulting in better economic outcomes for immigrants. Candidates who are young, well-educated, fluent in English and/or French, have professional work experience, and other bonuses such as having Canadian education and/or work experience are given a higher CRS score under the Express Entry Comprehensive Ranking System (CRS), which increases their possibility of gaining permanent residence and ultimately succeeding in the Canadian labour market.

More immigrants selected from within Canada:

Another significant change has been the rise in the number of permanent residents chosen from within Canada. Prior to the pandemic, immigrants from other countries accounted for roughly 70% of those who landed under Express Entry, but that number dropped to 30% last year, with Immigration, Refugees and Citizenship Canada (IRCC) relying more on in-Canada candidates to meet its immigration targets amid pandemic-related disruptions like travel restrictions. It’s unclear whether IRCC would prioritise picking immigrants from outside of Canada or within Canada after the pandemic, but we do know that Immigration Minister Sean Fraser’s mandate letter directs him to develop new in-Canada immigration paths. Furthermore, provinces and territories are increasingly picking candidates from within Canada through the Provincial Nominee Program (PNP) and other channels.

The trend of in-Canada selection is also supported by Canadian government research, which demonstrates that former international students and temporary foreign workers profit from their Canadian experience in the labour market after they become permanent residents.

More Canadian government investment to help newcomers:

The IRCC’s increased investment in immigrant settlement programmes such as workforce and language training is a third significant factor to consider. IRCC now spends almost $2 billion each year on such services, up from around $350 million twenty years ago. These services are also provided before arrival to provide immigrants with relevant information and support to help them settle into Canada more quickly.

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