Canada’s Labor Market Absorbing Its Population Boom Is “Impossible”: National Bank

Canada embarked on an ambitious mission to grow its economy using rapid population growth. After hitting unreal immigration targets they may have forgotten to plan one detail—what are people going to do when they get to Canada? That was the focus of the latest analysis from National Bank of Canada (NBF). The bank’s chief economist warns the country’s labor market is increasingly unable to absorb its population growth. 

Canada’s Labor Market Attracted A Historic 125k Workers In January

Last week’s Labor Force Survey (LFS) showed historic growth for Canada’s working-age population. The country added 125k workers just that month, about 4.7% growth when annualized. While the headline data revealed a falling unemployment rate, we emphasized this was largely due to methodology. Increasingly the data considers more people as “long term unemployed,” due to giving up on trying to find employment.  

In short, the country is producing a lot of workers. Finding jobs for all of these workers is proving much more difficult than policymakers had anticipated. 

It’s Impossible For Canada’s Labor Market To Absorb This Growth

No place highlights the problem more than the Greater Toronto Area (GTA), according to NBF. The bank’s analysis shows 32.6k of the workers added last month arrived in this area. With annualized growth at 6.8%, the working aged population is growing nearly 50% faster than national growth.  

“The GTA, which accounts for about 18% of Canada’s population, is currently responsible for more than 25% of the country’s population growth,” explains Stephane Marion, Chief Economist at NBF. 

Adding, “With the current interest rate structure, it is simply impossible for the labour market to absorb such a large number of newcomers.”

Source: National Bank of Canada.

To illustrate this point, the bank provided the above chart—the employment-to-population ratio for the GTA. The ratio fell to 61.4% in January, the lowest level since 2021—in the middle of the pandemic restrictions. Not a great start. 

Historically, the GTA is considered a high growth employment region that tends to outperform nationally. Marion warns the employment rate on average is 0.8 points higher than the national average, but that’s no longer the case. Migrating to the country’s economic engine now increases a person’s odds of unemployment, a potentially fatal issue for the national economy. 

Canada Needs To Step Back & Take A Non-Partisan Approach

The bank’s chief economist urges policymakers to consider how disruptive this may be for Canada. Especially during a period of rapid population growth. 

“We strongly advocate the creation of a non-partisan council of experts to provide policymakers with a transparent estimate of the total annual population growth that the economy can absorb at any given time,” says Marion. 

“This council could play a key role in maintaining Canada’s international reputation as a welcoming place for foreign talent.” 

NBF is far from the first institution to warn the Titanic is heading towards an iceberg. On several occasions, BMO has highlighted reckless scaling of the labor force without a viable plan. RBC, the country’s largest bank, has also warned that Canada is scrambling to attract labor but has no actual plan for what that talent will do.



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  • Mark Bayly 2 months ago

    Vote importing is much more important to federal governments than the economy

    • Mark Croucher 2 months ago

      Here on PEI, less than 1% of the population increase over the last year has trade skills. Right now, you can’t call a plumber, electrician or carpenter without telling you that they can’t even come out to “quote” the job for upwards of 6 months. If you want to get a house built, it’s currently a year. So not only does our new population not have the skillsets we need, they aren’t going to be out of school for two years if they came to study! This is not a plan, is a slow-moving disaster! To make matters worse, how does a place with a population of 180K add 2K in residents with hardly any vacancy rates or homes for sale?

      • Sesterce 2 months ago

        You put more mattresses next to the old ones. Once that’s done, we will move on to bunk beds. And after that, we will need to switch to triple and quadruple bunk beds!

      • Ses 2 months ago

        You put more mattresses next to the old ones. Once that’s done, we will move on to bunk beds. And after that, we will need to switch to triple and quadruple bunk beds!

      • Sesterce 2 months ago

        You put more mattresses next to the old ones. Once that’s done, we will move on to bunk beds. And after that, we will need to switch to triple and quadruple bunk beds!

    • Mike 2 months ago

      I had the same concern Mark. Elections Canada says that only Canadian citizens can vote, and in order to apply for citizenship, a new immigrant needs to be a permanent resident for three years. Not sure how long the application process takes. But it seems that this recent surge will not be eligible for the upcoming election voting. But your point stands true for future elections.

  • Bill Jenkins 2 months ago

    Welcome Trudeau’s Canadian nightmare. But don’t worry, he has your back…..and the budget will balance itself!

  • terry macket 2 months ago

    This is typical for this government
    The rush to make extreme polices in all areas of the government without thinking of the end result 🤔

  • Chip 2 months ago

    When my dad immigrated in the 1970s he needed to have a job lined up first. It was in the Arctic so that’s where he went.

    But that was before politicians decided to import voters, not workers.

  • Chris Colman 2 months ago

    Total federal incompetents. Talk about too much too fast on the immigration policy. Total disconnect with reality. Children in senior levels of grade 6,7, and 8 at most Canadian schools would realize the people have to live somewhere if they are moving here. They would say if there is already a housing is already scarce before the increases why such massive moves to create such huge problems with sky rocketing rents or home purchases.

  • Cherice Telenko 2 months ago

    Although I’m not one to get too political ( they’re all chameleons) it is my understanding that one of the reasons for this growth was Trudeau’s quest to put Canada in the spotlight and have it classed as a humanitarian country. Apparently, this would “leave his mark, just like his Daddy did”, making him eligible for a prestigious award ( I believe it was the Nobel Peace Prize that was mentioned). True or not, it obviously wasn’t thought through and we’re feeling the fallout of another half baked decision. Not sure how many decisions Trudeau actually gets to make though everything I’ve been learning would say, not too many. He just does what he’s told by the “Big Boys” and Canada just has to accept that we’re just too small to truly have a voice that matters. He has to play nice and enjoy his little role in this show.

  • Scott 2 months ago

    Both Trudeau’s have been unmitigated disasters that took (and will take) a generation to unravel. They make Trump look like an elder statesman…

  • Bryan Ethier 2 months ago

    The Libs are importing voters.This is the only consideration.

  • Craig R 2 months ago

    Low interest rates fuel inflation, the housing crisis, generational unfairness and environmental collapse. Time Goverments stopped borrowing from the future to buy votes in the present.

    • Zoran 2 months ago

      My family immigrated to Canada in 1995. Jobs were plentiful, my dad worked two at one point. Cost of living was a non-issue, affordable groceries and housing.. We didn’t just get by, we literally thrived. You could stretch a $100 bill quite far (nearly two full grocery carts is what I’m hearing)…

      Today, $100 gets you two grocery bags (not carts), and that’s not counting meat..

      The amount of homeless people in this country is appalling. You can’t tell me that it’s alright to keep bringing people to Canada, while those that were born here are struggling to make ends meet. People are living in shelters, in parks/wooded areas, under bridges next to highway exits. This is unacceptable, something needs to change.

    • Rahul Kulkarni 2 months ago

      We are net importer of refugees and fake students as well as net exporter of tax payer dollars to the world. Our governments are more concerned about peace in the middle east than people dying in GTA hospitals

  • Zoran Kusljic 2 months ago

    There wasn’t anything racist in my comment, so why was it taken down?? Sure, let’s just stick our head in the sand and pretend everything is just fine. Kind of self-defeating in terms of your article here…

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