As Canada emerges from the aftermath of the COVID-19 pandemic, the importance of immigration in replenishing the labour force has never been more evident. The influx of skilled workers from abroad is not only essential to meet the immediate demand in various sectors but also plays a crucial role in mitigating the long-term impacts of Canada's aging population on the labour market.
The Aging Workforce: A Challenge and an Opportunity
Canada's working-age population, those between 15 to 64 years, is aging. With more than one in five Canadians nearing retirement, the demographic composition of the workforce is shifting. Currently, working-age Canadians constitute 64.8% of the population, a figure projected to fall below 60% in the next three decades. However, this demographic shift presents an opportunity. Immigration has been the driving force behind Canada's labour supply for many years. In fact, during the 2010s, over four-fifths of the growth in Canada's labour force came from immigration. While modest, sustained increases in immigration levels will not fully offset the longer-term impacts of an aging population, they are critical for alleviating the effects of aging on the labour market over time.
Record Immigration Levels: A Boost to the Economy
The year 2021 marked a significant milestone in Canada's immigration history. Despite the challenges posed by the pandemic, Canada admitted 405,800 immigrants, the highest level in its history. The composition of these immigrants was diverse - 60% were in the economic class, 26% were in the family class, and 13% were refugees, with an increased share of refugees since 2016.
Rising Earnings Among New Immigrants: A Positive Trend
The economic outcomes for new immigrants have shown a promising trend. Earnings in the first full year rose by 39% among economic immigrants between the 2010 and 2018 entry cohorts. This upward trend was not limited to economic immigrants alone. Family class immigrants also saw a substantial increase in earnings—27%, while growth among refugees was 9%.
Looking Ahead: Challenges and Opportunities
While the improved economic outcomes for recent immigrants are encouraging, challenges persist. Issues related to skill utilization, including barriers related to credential recognition, continue to be a hurdle for many. Addressing these challenges is key to improving social and economic mobility among newcomers and enhancing the skills and competitiveness of Canada's workforce. Temporary Foreign Workers (TFWs) and international students, who are transitioning to permanent residency in greater numbers, have become increasingly important sources of labour supply. Their integration into the Canadian labour market will be a significant factor in shaping Canada's economic future. In conclusion, immigration is not just a demographic necessity for Canada; it is a strategic advantage. By embracing this advantage, Canada can ensure a vibrant and diverse workforce that is ready to meet the challenges of the future.
