Canada Is Running Low On Cheap Labor As Immigration Remains Minimal: BMO

Canada immigration is improving from pandemic lows, but it’s still weak. A BMO economics analysis shows the net flow of non-permanent residents was minimal in Q2 2021. It’s better than the beginning of the pandemic when the flows were negative, but not by much. The bank sees this as a big contributor to the rising job vacancies, and will potentially force wages to rise to attract domestic labor. 

Canada Is Seeing A Lot Fewer Non-Permanent Residents

Canada’s inflow of non-permanent residents is still much lower than normal. During the beginning of the pandemic, there were net outflows, but those have since reversed. Positive flows are better than contractions, but they’re still fairly close to nil, especially in contrast to pre-2020 numbers. 

The lack of non-permanent residents has put a major drag on the labor supply. “This is likely adding to the labor shortage situation in Canada, as it appears difficult to pull domestic labor into jobs normally filled by foreign workers. Or it might take more significant wage increases to do so,” said BMO. 

A Lack of Non-Permanent Residents Is Making The Labor Shortage Worse

Over the past three quarters, the inflow of non-percent residents has been around 70,000/people per year. BMO says this is about 30% lower than the 100,000/people per year that was the norm before the pandemic began. 

During this drought of non-permanent residents, the labor shortages have continued to pile up. “Surely enough, Canadian job vacancies are now running roughly 100k above pre-pandemic levels (although rising quickly),” said the bank. 

“Easing of labor shortages might be predicated on these population flows returning (which might be a while), unless policymakers can spur participation domestically.” 

Basically, either find immigrants or raise wages to attract domestic labor. The immigration brochure must be missing the part where they pitch you providing cheap labor, so domestic companies can avoid wage increases. 

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  • SH 1 year ago

    Notice how the supply of cheap labour went parabolic in 2016 until Covid.

    Hmm, I wonder what happened in late 2015 to have prompted this unrelenting assault on Canadian working and middle class wages?

  • Vincent Fornelli 1 year ago

    The former doctor that recently immigrated to Canada making me coffee was a blatant reminder this is about increasing the labor supply to force wages down, not necessarily about carving out a better life for immigrants.

    Canada used to be a great place to move to. No catch. You could move here, get a job, scrimp and save and own a house five years later. No catch, just a wonderful place.

    Now it’s a great place only compared to places overrun by militias.

    • Snwestern 1 year ago

      Ain’t that the truth. Canada has gone full on predatory on immigrants so that ”they will buy our houses and drive prices to the moon”. Every pillar of the Canadian establishment is pushing on this narrative. Other than refugees from war zones, hard to see why anyone who’s got a net worth of $1m would move to Canada’s overpriced cities with high cost of living and no job prospects. The establishment actually believes it’s own propaganda – just not sure anyone with half a brain believes it.

    • Not a slave 1 year ago

      Slave factory for third world countries.
      Lawyers, doctors, teachers are cleaning houses, working in Canadian retail stores, minimum wage labor of highly educated people.

  • Jamush 1 year ago

    And millenials and their parents keep voting for this to keep our wages down and opportunities low.

  • Totag On 1 year ago

    This headline is so sad, it clearly shows the whole purpose of immigration is to depress Canadian’s wages and improve the strength of business owners/ corporates in negotiations. Imagine if we have a system like Finland, Iceland where they are all focussed on improving the living conditions of their own people.

  • BCGuy 1 year ago

    Jesus we have too many new residents already! People living two to a room., in vans, in motorhomes, in tents.
    And the money print presses keep unleashing fury on our broken country.

  • Love CA 1 year ago

    There was this Orthopedic Surgeon working in middle east – great job, great pay and perks . Alas moved to CA for a Illusionary life.
    Finally landed up buying a smoke store and works his *ss off.
    Cheers, welcome to CA the land of future slavery.

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