Predictive But Unheeded Canadian Labour Woes

"Not only has Canada experienced an unprecedented surge in immigration, but the composition of recent newcomers has been markedly different than in the past."

"[Since 2015 -- when the Liberal government of Justin Trudeau took office], the average nominal wage gap between temporary and Canadian-born workers has more than doubled."

"[By mid-2024, non-permanent residents were representing] almost two-thirds of population growth [in a] sharp divergence [from the norm]."

"[Dropping wages among] non-permanent workers [could be a sign that] the productive capacity of the Canadian economy grew less than it would have if recent newcomers had the same socioeconomic characteristics as in the past."

The Shift in Canadian Immigration Composition and its Effect on Wages .. Bank of Canada report

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As younger, lower-skilled immigrants enter Canada to shore up its lagging workforce, the share in the labour force of native-born Canadian workers has dropped almost by ten percent since 2006, according to a report issued by the Bank of Canada documenting the country's economy becoming increasingly reliant on migrant workers on low-wages. The bank's Economic Analysis Department published a discussion paper on May 9.

 

The analysis discovered that the average Canadian immigrant has become younger, lower-skilled and likelier to emanate from poor regions of the world: India, sub-Saharan Africa or the Middle East, comprising a situation driven largely by a temporary migration surge. Among Canada's surging ranks of temporary migrant workers wages have been "reduced significantly relative to Canadian-born workers" the paper states. 

 

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According to the authors' calculations, the average migrant worker in Canada is paid over one-fifth less than a Canadian-born worker in comparable working positions. Prior to 2014, the wage gap was 9.5 percent, rising to 22.6 percent by 2023. The paper, titled The Shift in Canadian Immigration Composition and its Effect on Wages, is regarded as one of the most definitive official documents yet produced with respect to the massive surge of migrant workers brought to Canada immediately following the COVID-19 pandemic.

Canada began to accept over a million newcomers annually, beginning in 2022, for the most part in "non-permanent" categories of immigrants in a spectrum from international students, among those admitted under the international mobility program, to temporary foreign workers. This massive intake of workers was not matched anywhere else in the world of advanced economies.

 

Population growth in Canada between 2019 and 2023 amounted to over six percent, triple the rate in the United States, and double that in Switzerland, the two developed economy countries analyzed for the paper with a demographic shift coming a distant close to Canada's. The situation is hardly reflective of the norm for Canada traditionally where immigration flows are "generally stable and predictable over history."

 

Canadian population growth until 2015 was almost entirely unaffected by "non-permanent residents". Immigration came through permanent channels; the "NPR" cohort vanishingly small to the extent that new temporary immigrants entering the country were generally negated by those leaving.  As well, temporary migrants were sourced from different regions. The region between 2006 and 2014 where the highest level of non-permanent immigration to Canada arrived from was Northern and Western Europe. Now, since 2024 India has replaced that traditional source.

 

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"An increasing number of NPRs have been migrating from lower-income regions" the report states. Canadian "net births" have been sharply reduced, even while an massive influx of migrant workers increased. Until the early 1990s, net births remained the primary driver of population growth. They became "negligible" by 2024, the paper notes. Canadian babies born in 2024 were equivalent to the number of Canadians who died. As well, the paper documents a marked decrease in the labour force of Canadian-born workers.

 

Alarmingly the post-pandemic surge in migrant workers matched a massive increase in youth unemployment, particularly among retail and food services -- sectors that relied traditionally on part-time entry-level workers, now relying on temporary work visas. Service jobs of a temporary nature were, in the past, employment opportunities for high-school and university students as a means to pay their tuition fees. Less attractive to Canadian-born students looking for summer employment was agricultural work, where migrant workers took up the slack.

 

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King's Trust Canada found in a November report that between 2015 and 2023 the rate of temporary foreign workers in Canadian restaurants had increased by a whopping 634 percent. The Bank of Canada report authors surmise that the  trend they analyzed could have an effect on the country's overall productivity -- how much the average Canadian worker is capable of producing. 

In recent years they note, Canadian productivity has gone into sharp decline with each passing year yielding a progressively lower rate of per-capita GDP than the year before. This trend is likely exacerbated, according to analysts, by Canada's surge in cheap, low-skilled temporary labour. Former Bank of Canada governor David Dodge in 2023 warned that a "large and rising inflow of workers with lower skills" was impacting in depressing wages and propping up "uncompetitive" businesses.

 

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Canada's Immigration Out of Whack With Reality

"Over the past few years, we’ve seen a massive spike in temporary immigration, whether it’s temporary foreign workers or whether it’s international students, in particular, that have grown at a rate far beyond what Canada has been able to absorb."

"Increasingly, more and more businesses are relying on temporary foreign workers in a way that is driving down wages in some sectors."

"We want to get those numbers down."

Prime Minister Justin Trudeau  

New Canadians wave the national flag during a citizenship ceremony in Toronto. Steve Russell/Toronto Star/Getty Images

Previous government administrations in Canada spoke of accelerated intake of immigrants totalling around 350,000 yearly. In and of itself an enormous number of newcomers to be welcomed and integrated into Canadian societies. For the most part, Canadians are welcoming people, and themselves mostly of immigrant stock in this relatively young nation, felt compelled to agree that Canada benefited hugely from its reliance on immigration to boost its population numbers along with the economy.

Since the Liberal government of Justin Trudeau from 2015 to the present, immigration numbers, temporary workers, foreign students, refugees and illegal migrants have swelled those yearly numbers beyond a million people annually. The most immediate problems to have surfaced is the strain on social services. Housing is another problem; there simply is not enough. A dearth of houses and priced out of a middle-class market. Canada's ailing universal health care system is stumbling along troubled by surgical wait times, mobbed hospital emergency departments and a lack of family physicians.

And while temporary foreign workers are brought into the country to take jobs that most Canadians themselves won't touch, the unemployment rate among migrants, and those on student visas as well as Canadian youth is much higher than among the general population. Prime Minister Justin Trudeau has made public admissions of immigration number impacts on the economy, on quality of life, on strained social services, but it has been his policies that have created the situation.

Canada's immigration intake was once a reasonable number, not the impossible influx it has become under Mr. Trudeau. The system of selecting prime immigrants by judging how they would benefit Canada was a point system that took into account education level, age, professional background, for choices that enhanced immigrants' ability to make maximum use of skills and experience and the drive to maximize both to Canada's credit while providing a promising future for successful candidates.

Responsible immigration selection protocols have gone out the window of opportunity by the Liberal government. The points system is now largely ignored. Government speaks of labour shortages and the need to increase immigration intake to fill that gap. Yet bringing in  unskilled workers with no experience and no incentive to upgrade their educational and employment opportunities benefits neither the workers nor the country.

 

Canada's Immigration Minister Marc Miller announced plans to reduce the share of temporary residents living in Canada from 6.2 to five per cent of the population. (Spencer Colby/The Canadian Press)

 

Add to that the untamed issue of allowing migrants to flood the social security system, welfare, emergency housing, at a time of growing homelessness in the Canadian population at large, and you have a burgeoning dysfunctional situation difficult to control and to cope with. Those who now enter Canada illegally have as much opportunity to achieve permanent resident status under this government as do temporary foreign workers whose goal is to achieve permanent residency in Canada.

In 2023 according to Statistics Canada a total of 1.3 million new entrants swelled Canadian population numbers.Permanent immigrants represented 500,000; less than half of the total entrants while 800,000 were non-permanent residents comprised of temporary foreign workers and international students. Public opinion polls now reflect the perception that immigration is an issue of high concern for a sizeable number of Canadians, and rising. 

Spurred by falling GDP per capita, declining consumer spending, inadequate housing growth, and dwindling labour markets. Little wonder that a sizeable (44%) proportion of Canadians feel that immigration is responsible now for affecting the country negatively, and a wider percentage now believe immigration volumes should be decreased. 

 

Immigration Minister Marc Miller announced a new route for uneducated applicants for permanent residency: "The initiative would support the modernization of the economic immigration system by expanding the selection of permanent residents to candidates with a more diverse range of skills and experience". Unskilled foreign workers will likely be absorbed by the 'initiative', who have overstayed their visas.

At the same time a foreign student 'cap' announced by the Immigration Minister remains so high the maximum number of new students admitted in 2025 will rank 70 percent higher than the entire international student body of 2015. These outcomes are a reflection of nine years of the Trudeau government handling the affairs of the nation.

As part of its plan to shrink the number of temporary residents in Canada by 2027, Ottawa is cutting the number of temporary foreign workers that companies can hire in most sectors from 30 per cent to 20 per cent of their workforces. (Jane Robertson/CBC)