As Canada continues with its aggressive immigration targets for the next three years, the labour market continues its strong performance, which is good news for newcomers.
According to figures released by Statistics Canada, the Canadian economy added 10,000 jobs in November after adding an unexpected 108,000 jobs in October.
October’s spike in employment (which increased to 19,656,200 thanks to the addition of the 108,300 jobs and was the biggest increase since February) was much higher than published predictions of about 10,000 jobs being added.
Canada’s economy remains strong for newcomers
Canada’s unemployment rate in November dropped slightly to 5.1 percent from 5.2 percent in October with more Canadians looking for work, the latest labour force survey showed.
With many economists pointing to a possible recession in 2023 amid rising interest rates, the job gains in November and particularly in October have some experts puzzled following four months of job losses and little growth.
Also, Statistics Canada’s job vacancy report for the third quarter of 2022 (Q3 – July, August and September) reveals that Canada still faces labour shortages as employers try to fill almost a million (959,600) job vacancies.
“The Canadian labour market clearly still has some steam left to it,” noted TD economist Rishi Sondhi. “This (October) jobs report checked all the boxes in terms of being a blowout report.”
Immigration continues to rise
In November, according to StatsCan, employment increased in several sectors, including finance, insurance, real estate, rental and leasing, manufacturing, information, culture and recreation.
Employment fell in construction and in wholesale and retail trade. The loss of construction jobs was mainly felt in British Columbia and Alberta.
In December, Job search company Indeed reported that postings on its site for Canadian tech roles had fallen 32 percent since May 2021. Indeed said that the job losses in the tech sector are showing no signs of stabilizing.
With job postings across all sectors slipping nine percent over the summer and increasing slightly since September, the tech openings drop brings postings in the industry closer to their pre-pandemic level than the rest of the economy for the first time in two years.
In October, employment rose in the manufacturing, construction, accommodation, and food services sectors. Alberta posted the largest gain in manufacturing jobs.
These unexpected job gains come as immigration is also on the rise.
The country shattered its all-time immigration record by landing more than 405,000 newcomers in 2021. The goal for this year is almost 432,000 immigrants.
The government also recently announced its targets for 2023-2025.
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Canada hopes to land 465,000 new immigrants in 2023. That number will rise to 485,000 newcomers in 2024 and will jump in 2025 to 500,000 new arrivals.
For working-aged women who immigrated to this country within the last five years had an employment rate of 69.7 percent in November of this year. That’s the highest employment rate, in the month of November, for recent Canadian immigrant women arrivals in the last 16 years.
Bank of Canada governor Tiff Macklem recently urged Canadian employers to keep hiring immigrants — and recent immigrants in particular — to meet the country’s rising labour demand and combat inflation.
Macklem said labour shortages have put upward pressure on wages across the country and have subsequently driven inflation up.
Immigration key to economic growth
With job market vacancies remaining high, plus a shrinking labour force, and an aging population, immigration is seen as the key to economic growth as it is clear the country cannot meet labour market demands via natural growth.
The 2021 census data on immigration showed that 23 percent of Canada’s population is an immigrant. The census defined immigrants as people who are, or have ever been, a landed immigrant or permanent resident.
The census survey shows that newcomers have been successful in finding jobs.
More than 62 percent of immigrants aged 15 and over are employed. The survey also discovered that immigrants who landed in Canada over the past five years had an employment rate of 70.7 percent. That’s a higher rate than in October 2019 before the global COVID-19 pandemic.
Canada’s economy outshines others
As Scotiabank Vice President and Head of Capital Markets Economics Derek Holt points out, Canada’s economy “continues to outshine just about everyone else’s” by posting much stronger than expected GDP growth of 2.9 percent in the third quarter of 2022.
Holt added that this contradicts “the narrative that growth is slowing into the fourth quarter of the year.”
“GDP growth,” said Holt, “has been on fire for five consecutive quarters and hence throughout a period that has been marked by much weaker performances elsewhere from the US to Germany, France, the UK and Japan, to name a few.”
Will Canada’s economy slow in 2023?
What will the job market for newcomers to Canada look like as we hurl towards 2023?
Desjardins chief economist Jimmy Jean recently warned that even though the surprising October jobless report surpassed expectations by a significant amount, the Canadian economy is still expected to slow considerably in response to higher rates.
November’s numbers seem to suggest that the economy is still growing but not as fast as in October.
However, Scotiabank’s Holt cautions that the “slowing narrative” is based on incomplete October data and zero data for the rest of 2022.
In March, the Bank of Canada started hiking interest rates with the first of six consecutive rate hikes. Another interest rate hike is expected in early December.
It’s unclear yet whether there will be another hike in January.
Here’s a summary by the Canadian Press of the country’s October employment (numbers from the previous month are in brackets):
Unemployment rate: 5.2 percent (5.2)
Employment rate: 61.6 percent (61.3)
Participation rate: 64.9 percent (64.7)
Number unemployed: 1,073,400 (1,071,600)
Number working: 19,656,200 (19,547,900)
Youth (15-24 years) unemployment rate: 10.6 percent (9.8)
Men (25 plus) unemployment rate: 4.3 percent (4.5)
Women (25 plus) unemployment rate: 4.3 percent (4.4)
