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    A Resilient Canadian Labour Market

    Despite the ongoing Coronavirus pandemic, Canada is currently experiencing its lowest unemployment rate. This can be attributed to the demographic changes that the nation’s workforce underwent before the pandemic. The primary concern, in terms of immigration policy, is how a recession will impact the job market performance of newcomers who obtain permanent residence during economic downturns. Recent research suggests that these immigrants may fear negative impacts on their labour market outcomes for the rest of their careers in Canada.

    The Pandemic’s Unique Impact on the Labour Market

    It is important to recognize that the COVID recession is distinct from previous economic downturns. Immigrants who have recently entered or will be granted entry to Canada remain confident in the Canadian labour market’s ability to recover and provide opportunities.

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    Retirements and Labour Market Gaps

    Canada is witnessing a surge in retirements due to baby boomers exiting the workforce. This has contributed to the country’s lowest unemployment rate in history before the COVID recession. Approximately 9 million of Canada’s 20 million workers are baby boomers who will reach the 65-year retirement age within the next decade. This creates a labour market gap, which Canada’s low birth rate and reliance on outside talent must address.

    Immigration: A Key Factor in Economic Development

    Immigration is crucial to Canada’s economic development, as immigrants have contributed up to 100% of the country’s yearly labour force growth on several occasions during the pre-pandemic period. Over the next ten years, this trend is expected to continue. As the Canadian labour force ages, wages are rising, and the unemployment rate is dropping, benefiting both immigrant and native-born workers.

    Immigration Policy Changes and Labour Market Outcomes

    In the last decade, Canada’s major immigration policy changes have influenced newcomers’ labour market outcomes. Key changes include a more competitive selection process and an increased focus on selecting Canadians as immigrants.

    A Shift to a Competitive Selection Process

    The new selection process for skilled immigrants focuses on human capital factors with a greater economic impact. Young candidates with professional work experience, Canadian education and work experience, fluency in French and/or English, and a high Comprehensive Ranking System (CRS) score are more likely to succeed in the Canadian labour market and obtain permanent residence.

    Increasing Proportion of Canadian Immigrants

    The proportion of people choosing to live permanently in Canada is growing. During the pre-pandemic period, new arrivals from outside the country accounted for approximately 70% of immigrants entering through Express Entry. However, this percentage dropped to around 30% in 2021 due to travel restrictions and other pandemic-related disruptions. The Canadian government is increasingly relying on local applicants to meet its immigration goals, as evidenced by the Provincial Nominee Program and other streams.

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    Conclusion: A Promising Outlook for Immigrants

    With ongoing changes to immigration policies and an emphasis on filling labour market gaps, the future looks promising for immigrants in the Canadian labour market. As baby boomers continue to retire and the economy recovers from the pandemic, opportunities for both native-born and immigrant workers will increase.

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