Can Immigration Ease Labour Market Woes?

3 minute read

Minister of Immigration, Refugees, and Citizenship, Sean Fraser has introduced the 2022 – 2024 Immigration Levels Plan. The Plan sets out ambitious immigration targets to welcome over 1.3 million immigrants over the next three years to aid in Canada’s economic recovery, fuel post-pandemic growth, and help strengthen communities and industries that have been hit most by the pandemic. 

The introduction of the plan comes after Canada welcomed more than 405,000 new permanent residents in 2021, which was the highest number of immigrants welcomed in a single year in the country’s history. 

A pillar of the plan will also be to continue to support global crises by providing humanitarian immigration. Canada remains committed to resettle at least 40,000 Afghan nationals over the next two years. Similar humanitarian efforts are likely to take place over the course of the plan, including the anticipated refugees that will be welcomed from Ukraine given the ongoing Russia-Ukraine crisis. 

Deputy Prime Minister and Minister of Finance, Chrystia Freeland has signaled competitiveness, productivity, and a clear sustained economic agenda as the central focus for Budget 2022. With Canada’s economy experiencing low productivity and significant labour shortages, the government sees immigration as the key to addressing these challenges. And it could be, if supported effectively. 

While the labour market has rebounded since the onset of the pandemic, businesses are continuing to struggle to hire workers, leaving hundreds of thousands of jobs in all sectors still open. 55 percent of entrepreneurs have said that they are finding it difficult to hire the workers they need to help their businesses operate while a quarter of them are having a hard time retaining the employees they already have.

The Budget needs to accompany the government’s ambitious immigration targets with successful settlement, integration, and housing measures that ensure that the 1.3 million new immigrants being welcomed to the country achieve the economic advantage that the government hopes for, and that our economy so desperately needs. 

Improved settlement service funding will be critical to ensure that new immigrants are meeting their economic potential. In 2021, almost 90% of new immigrants settled in urban centres. Smaller communities across the country are particularly poised to benefit from the additional skilled labour of new immigrants, helping boost their local economies, and assist in reducing the brain drain from larger urban areas. 

Budget 2022 should include settlement service funding that keeps pace with the increase of immigration levels to support small and rural communities in their efforts to attract immigrants to their communities while also assisting immigrants finding employment that actually matches their skills and experience, helping reach their full economic potential. 

The ambitious immigration targets also come at a time when housing affordability continues to be at a crisis level. In January 2022, the national average home price was $748, 450, which is up 21% from the same month last year. Skyrocketing housing prices continue to impact all corners of the country. And with 60% of the new immigrants being in the economic class, they will generally be individuals and families who will want to achieve home ownership within the first few years of settling into the country. 

Freeland has stated that she sees housing as one of the core issues her government is looking at as they prepare the budget and that supply is the challenge of the housing crisis. With the Liberal’s campaign platform committing to a number of policies aimed at addressing the housing affordability crisis, the policies Freeland prioritizes in the budget remains to be seen. 

What is clear is that Canada’s immigration policy will not be successful unless accompanied by corresponding supportive policies. There needs to be explicit plans to manage and handle the influx of new Canadians. Without them, the ambitious economic benefits that the immigration plan sets out to address will fall short of their significant potential.

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