The unemployment rate in Canada recorded a record low level of 5.1%, leading to a significant labor shortage. Job vacancies are 80% higher than they were in the pre-pandemic period.

These job vacancies are largely due to the aging population in Canada. More than one in five working-age Canadians is nearing retirement age. This effect is exacerbated by the low birth rate in Canada, which is only 1.4 children per woman. This birth rate is not high enough to replace those who retire, increased immigration is the key.

A recent study by Statistics Canada indicates that in 2021, new immigrants (those who had been in Canada for 10 years or less) made up 8% of the total employed labor force but accounted for 13% of workers in the food services and hospitality sector, as well as 11% in the professional services sector, and 10% in both manufacturing and transportation sectors.

The study also showed that job vacancies continue to trend upward in the manufacturing and retail sectors. Job vacancies in manufacturing peaked at 87,400 in the last quarter, and employer vacancies in retail reached 114,600.

In the years preceding the pandemic, immigrants experienced a rapid increase in their employment rate. In 2021, 77% of new immigrants were employed, and the employment rate of long-term immigrants (those who had been in Canada for more than 10 years) was 84%. Over the past decade, the number of work permit holders in Canada jumped from 111,000 to 770,000. These workers are often classified in low-skilled sectors such as agriculture, accommodation and food services, and administrative services.

In 2020, 67% of new economic immigrants to Canada were former work permit holders or international students. There was a notable increase in the number of international students who obtained permanent residence within 10 years of arriving in Canada. Many choose to obtain a Post-Graduation Work Permit (PGWP) as a first step upon completing their studies.

The study also found that many work permit holders and permanent residents continue to see their skills underutilized by employers due to the difficulty of obtaining the necessary accreditation in Canada. The number of college-educated immigrants working in jobs requiring university degrees declined from 46% to just 38% between 2001 and 2016. This is a trend that may eventually lead to shortages in high-skilled employment sectors.

In the long term, Canada must continue to increase the flow of skilled labor to mitigate the effects caused by the aging population in the labor market. Canada recognizes that immigrants are vital to maintaining a strong economy and offers more than 100 economic immigration pathways.

Express Entry is the leading federal pathway for permanent residence. Express Entry draws have been suspended in recent months, but Canadian Immigration Minister Sean Fraser said Express Entry draws are scheduled to return to normal on July 6.

Editor: Dima Abu Khair