Immigration in Canada is improving after a pandemic but is still weak. AN MET economic analysis shows that the net flow of non-permanent residents was minimal in the second quarter of 2021. It is better than the start of the pandemic when flows were negative, but not much. The bank sees this as a major contributor to rising job opportunities and may force wages to rise to attract domestic workers.
Canada sees far fewer non-permanent residents
The influx of non-permanent residents into Canada is still much lower than normal. There were net outflows at the start of the pandemic, but they have since reversed. Positive flows are better than contractions, but they are still pretty close to zero, especially in contrast to the pre-2020 numbers.
The lack of non-permanent residents has severely hampered the labor supply. “This is likely contributing to the labor shortage in Canada as it seems difficult to attract domestic workers into jobs normally filled by foreign workers. Or maybe more significant pay increases are needed,” says BMO.
A lack of non-permanent residents makes the labor shortage worse
In the past three quarters, the influx of non-percent residents was around 70,000/person per year. MET says this is about 30% lower than the 100,000/people per year that were the norm before the pandemic started.
During this drought of non-permanent residents, labor shortages piled up. “Certainly enough, Canadian job openings are now about 100k above pre-pandemic levels (although they are rising rapidly),” the bank said.
“Reducing labor shortages can be attributed to the return of these population flows (which may take a while) unless policymakers can encourage participation domestically.”
In short, seek out immigrants or raise wages to attract domestic work. The immigration brochure should be missing the part where they offer you cheap labor so that domestic companies can avoid pay increases.
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