Bank of Canada governor urges Ottawa to boost immigration to avoid interest rate hikes

Colin Singer
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Bank of Canada governor urges Ottawa to boost immigration to avoid interest rate hikes

Boosting immigration to Canada to fill jobs going begging for lack of workers will help the country stave off even higher interest rates, says Bank of Canada governor Tiff Macklem.

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“Businesses have had a hard time hiring enough workers to produce all the goods and services Canadians want to buy. Job vacancies are elevated, and firms report widespread labour shortages,” he said in a speech at the Conference on Diversity, Equity and Inclusion in Economics, Finance and Central Banking in Ottawa.

Businesses can’t keep up with demand in overheated Canadian economy

“This is symptomatic of an economy that is overheated. Businesses can’t keep up with demand, and this is driving prices higher.”

That inflation can be curbed by raising interest rates.

“Monetary policy affects demand. By raising interest rates, we are moderating spending, and that will reduce the demand for workers. Invariably, this has unequal consequences across sectors and across workers,” said Macklem.

But the governor of the country’s central bank explained immigration could also help mitigate the need for the Bank of Canada to raise interest rates.

“The other way to rebalance supply and demand is to increase the supply of workers,” he said. “That takes time and with inflation already far too high and with elevated risks that high inflation becomes entrenched increasing labour supply is not an alternative to slowing demand. 

“But it is a compliment. And the more we can do on supply, the less we will need to do on demand.”

Macklem’s message is clear: boost immigration or face even higher interest rate hikes.

In 2022, the Bank of Canada raised its target overnight rate seven times, pushing it up to 4.25 per cent, the highest that rate has gone since 2008, in its bid to curb inflation which hit 6.9 per cent in October. 

As the Bank of Canada raised its policy rate from 0.25 per cent in March in that series of rate hikes, it drove up prime rates and mortgage rates, making it all that much harder for Canadians to buy homes. 

Canada, like many other countries, was hard hit by the COVID-19 pandemic and locked down for a while and imposed many public health restrictions, all of which had a massive impact on the country’s economy.

COVID-19 public health restrictions led to unprecedented lockdowns in Canada

“Never before has so much of the economy been shut down, so suddenly and for so long,” said Macklem. 

“But thanks to new vaccines and exceptional fiscal and monetary policies, the recovery was the fastest ever. By August, four months after the employment lows of April (in 2020), nearly two-thirds of Canadian job losses were recouped.”

That fast recovery led to massive labour shortages as employers in several sectors of the economy struggled to find workers who had been laid off and moved on to other jobs.

In its third quarter, 2022 report, Statistics Canada noted there were still 959,600 job vacancies across the country, down 3.3 per cent from the record high of 992,200 vacant positions in the second quarter of the year but still much higher than for the same quarter in 2021.

“It was 8.3 per cent higher than in the third quarter of 2021 and 72.7 per cent higher than in the first quarter of 2020,” reported Statistics Canada.

The job vacancy rate, which is calculated by dividing the number of vacant positions in Canada by the total number of jobs, both filled and unfilled, was 5.4 per cent in the third quarter of 2022.

Immigration Minister Sean Fraser has responded to Canada’s labour shortages by raising immigration targets for each of the next three years to record levels.

In its 2023-2025 Immigration Levels Plan, Ottawa has set the target for 2023 at 465,000 new permanent residents. The country is to welcome 485,000 new permanent residents in 2024 and another 500,000 in 2025.

Canada to welcome 1.45 million immigrants over three years

That’s a total of 1.45 million immigrants to Canada over the coming three years.

Canadian employers trying to survive during this acute labour shortage can recruit and hire foreign nationals through the Temporary Foreign Worker Program (TFWP) and the International Mobility Program (IMP).

The Global Talent Stream (GTS), a part of the TFWP, can under normal processing situations lead to the granting of Canadian work permits and the processing of visa applications within two weeks.

Under the Express Entry system, immigrants can also apply for permanent residency online if they meet the eligibility criteria for one of three federal immigration programs, the Federal Skilled Worker Program (FSW), Federal Skilled Trades Program (FST), and Canada Experience Class Program (CEC),  or a participating provincial immigration program.

Candidates’ profiles then are ranked against each other according to a points-based system called the Comprehensive Ranking System (CRS). The highest-ranked candidates are considered for an Invitation to Apply (ITA) for permanent residence. Those receiving an ITA must quickly submit a full application and pay processing fees, within a delay of 90 days.

Through a network of Provincial Nominee Programs (PNP), almost all of Canada’s ten provinces and three territories can also nominate skilled worker candidates for admission to Canada when they have the specific skills required by local economies. Successful candidates who receive a provincial or territorial nomination can then apply for Canadian permanent residence through federal immigration authorities.

Quebec Makes Part Of Entrepreneur And Self-Employed Immigration Programs Francophone-Only

Colin Singer
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Quebec Makes Part Of Entrepreneur And Self-Employed Immigration Programs Francophone-Only

One of the streams of the Quebec Entrepreneur Program (QEP) and the whole Quebec Self-Employed Program (QSP) will only accept applications from Francophones as of Dec. 28.

The affected stream of the QEP is for candidates receiving support from a business accelerator, a business incubator or a university entrepreneurship centre, and who wish to open and manage a business in Quebec.

These programs are not being shut down or paused. The francophone province is simply shutting off applications to those who are not francophones.

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Candidates who wish to apply for these immigration programs will, starting on the Wednesday of the last week of this year, have to demonstrate a Level 7 mastery of French as per the Échelle Québécoise des Niveaux de Compétence en Français des Personnes Immigrantes Adultes, a rating system of French-language competency for adult immigrants.

There will be no limit as to the number of candidates who can apply through those programs who demonstrate that mastery of French.

The second stream of the QEP, the one which is for entrepreneurs who wish to operate a business they created bought with at least 25 per cent of the voting shares or at least 51 per cent of all shares of the enterprise, is already closed.

With this latest announcement, Quebec Immigration Minister Christine Fréchette is effectively, albeit perhaps temporarily, closing the door to the QEP for non-francophones.

“We are taking these measures to prioritize francophone economic immigration,” said Fréchette in French in a statement. “This is why only people with a mastery of French will be able to submit their applications for these two programs for entrepreneurs and self-employed workers in 2023.

“With this decision, we are acting to ensure the survival and vitality of the French language while helping immigrants integrate into Quebecois society.”

This clampdown on non-francophone immigration to Quebec comes roughly three weeks after Quebec Premier François Legault’s speech to open the 43rd session of the National Assembly of Quebec.

In it, Legault made it clear that stopping the decline of the use of French in the province is one of his top priorities and that he sees francophone immigration as a vital to achieving that goal.

All Economic Immigration To Quebec Will Be Francophone By 2026, Says Legault

By 2026, all economic immigrants to Quebec will have to be francophone under Legault’s vision.

“Previous Parti Québécois and Liberal Party governments accepted that 50 per cent (of economic immigrants to Quebec) speak French,” Legault is reported as saying in French in the Le Soleil daily newspaper.

“We have succeeded in the economic immigration categories in increasing that to 80 per cent and we must reach 100 per cent.”

Certainly, Montreal is becoming less francophone as immigration to the province has risen.

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In the past two decades, the proportion of people who speak French on the island of Montreal has dropped from 54 per cent to 48 per cent – and that concerns the Quebec premier.

Data from Immigration, Refugees and Citizenship Canada (IRCC) reveals that in the first nine months of this year, economic immigration accounted for almost 65.1 per cent of total immigration to Quebec.

Through the Canadian Experience Class (CEC), Caregiver, and Skilled Worker programs as well as the Entrepreneur, Investor and Self-Employed economic programs, Quebec welcomed 34,165 new permanent residents in the first nine months of 2022.

Although Quebec is well on track to receive 69,987 new permanent residents this year as it makes up for the drop in immigration during the first year of the COVID-19 pandemic, both the provincial immigration minister and Legault have made it clear they will not raise the provincial immigration target much above the current 50,000.

Prime Minister Justin Trudeau Scoffs At Notion Quebec Can’t Integrate More Immigrants

“It is up to Quebec to set its own targets for permanent immigration,” tweeted Fréchette in French after the provincial election.

“The upper limit for Quebec is now 50,000 (new permanent residents) due to our capacity to welcome, provide French-language services and integrate them.”

The francophone province’s immigration minister has maintained that Quebec is already welcoming proportionately more immigrants than do either the United States or France.

“Our position has remained the same: we need more control over immigration to protect the French language,” tweeted Fréchette.

In that tweet – retweeted by Legault without additional comment – the Quebec immigration minister wrote she would be continuing talks with federal Immigration Minister Sean Fraser.

In the 2023-2025 Immigration Levels Plan, Ottawa is targeting 465,000 new permanent residents in 2023, 485,000 new permanent residents in 2024 and 500,000 in 2025.

That’s a total of 1.45 million immigrants to Canada over the coming three years.

Under a provincial-federal agreement, Quebec’s annual share of new permanent residents is to be equal to its demographic clout within Canada. Since the province has 23 per cent of the country’s population, a national immigration target of 465,000 new permanent residents would mean Quebec could accept up to 106,950 new permanent residents next year.

Quebec Holding The Line On Immigration At Just Over 50,000

By 2025, that number would rise to 115,000.

But Legault’s CAQ government is steadfast in its opposition to that level of immigration to the province because Quebec lacks the ability to integrate that many newcomers into the Quebecois society every year.

Prime Minister Justin Trudeau disagrees. 

“Quebec at the moment is fully capable of welcoming 112,000 immigrants a year,” the prime minister reportedly told Presse Canadienne.

Employers Battling Labour Crunch Means Canada Work Permits Issued In Record Numbers

Colin Singer
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0
Employers Battling Labour Crunch Means Canada Work Permits Issued In Record Numbers

The latest data from Immigration, Refugees and Citizenship Canada (IRCC) reveals a record-breaking number of foreign nationals are working in Canada through the Temporary Foreign Worker Program (TFWP) and International Mobility Program (IMP) this year. 

In the first 10 months of this year alone, those two programs resulted in almost half a million foreign nationals, exactly 498,435, getting Canadian work permits.

That’s 20.3 per cent more work permits under these programs in the first 10 months of this year than the 414,170 in all of last year. 

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Based on the current trend, Ottawa could wind up issuing 598,122 work permits to foreign nationals by the end of this year, or 44.4 per cent more than in 2021.

Both programs are showing massive growth this year as employers increasingly turn to recruiting workers from outside the country to resolve Canadian labour shortages.

The IMP’s previous record for number of work permits issued was last year when the IRCC issued 310,805 to foreign nationals. 

Ottawa had already issued 378,365 work permits under the IMP by the end of October this year and, based on the current trend, could issue 454,038 work permits through the IMP this year. 

That performance would see Canada issuing more than twice as many work permits under the IMP this year compared to the 222,720 it issued under the same program only five years ago, in 2017.

Under the TFWP, immigration officials had already issued 120,070 work permits by the end of October this year, almost 16.2 per cent more in those 10 months than the 103,365 in all of last year. 

Based on the current trend, Ottawa could wind up issuing 144,084 work permits through the TFWP by the end of this year, or about 39.4 per cent more than in all of last year. 

That performance would mean the number of work permits issued through the TFWP would have almost doubled from the 72,965 in 2015, only seven years ago. 

Employers Turning To Foreign Workers To Fill The 959,600 Vacant Jobs

Employers are increasingly turning to foreign workers to fill jobs that are going begging for a want of Canadians to fill them.

In its third quarter job vacancies report, Statistics Canada noted there were then 959,600 vacant positions in Canada, down only slightly from the record high of 992,200 vacant positions in the second quarter of this year. 

“It was 8.3 per cent higher than in the third quarter of 2021 and 72.7 per cent higher than in the first quarter of 2020,” reports Statistics Canada.

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The job vacancy rate, which is calculated by dividing the number of vacant positions in Canada by the total number of jobs, both filled and unfilled, was 5.4 per cent in the third quarter of this year, down a smidgeon from 5.7 per cent in the previous quarter.

That’s a very, very tight labour market. Even if every unemployed person had the right skills and experience to do the available jobs, there were still barely enough people unemployed in Canada to fill the available jobs in the country during the third quarter – and, of course, there is no such perfect match in the workforce.

“There was an average of 1.1 unemployed persons for each job vacancy in Canada in the third quarter of 2022, similar to the record low reached in the second quarter,” reports Statistics Canada.

Canadian employers trying to survive during this acute labour shortage can recruit and hire foreign nationals through the TFWP and the IMP.

Ontario Snags More Than A Third Of All Foreign Nationals Coming To Canada With Work Permits

British Columbia and Quebec still have the highest job vacancy rates among the provinces and, perhaps unsurprisingly, are also two provinces where many of foreign nationals with work permits are going to work. 

In the first 10 months of this year, foreign nationals headed for British Columbia got 27,825 work permits through the TFWP and another 56,600 through the IMP. 

During the same period, foreign nationals headed for Quebec snagged 34,070 work permits through the TFWP and another 42,060 through the IMP.

If you are a candidate looking for a Canada job, or an employer looking to recruit foreign talent from abroad, immigration.ca can help. Access our expertise through our in-house recruitment enterprise www.skilledworker.com, “the leader in foreign recruitment”.

Ontario employers’ recruitment of workers from other countries through these programs, though, makes both British Columbia and Quebec’s numbers pale by comparison. 

Canada’s most populous province and the economic engine of Canada opened its arms to 37,200 foreign nationals who got work permits through the TFWP and another 140,170 through the IMP in the first 10 months of this year alone.

That’s a total of 177,370 foreign nationals with TFWP or IMP work permits in Ontario as of the end of October, or almost 35.6 per cent of the total number of such work permits issued across the country.

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