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Photo of Rebekah Young, VP, Head of Inclusion & Resilience Economics, Scotiabank. Young discusses thought leadership on immigration, the economy of Canada, and housing.
Rebekah Young, Vice President,
Head of Inclusion & Resilience Economics, Scotiabank

Newcomers, the economy and Canada’s housing crisis are top-of-mind issues for Rebekah Young in her new and unique role at Scotiabank. Named as the bank’s first head of Inclusion and Resilience Economics, Young’s mission is to provide thought leadership on inclusive economic growth that ensures higher productivity gains translate into improved well-being that is shared broadly across Canadian society. 

Young will be speaking at Prepare for Canada’s free Canadian Connections Summit on June 14. She and Stephanie Santos,  Project Coordinator for Pre Arrival Canada, will be presenting an overview of Canada’s labour market.

When she was appointed to this groundbreaking post, Young told The Globe and Mail’s David Parkinson that she sees her role as “thought leadership’ – not hard-core economics.” 

“I’ll be trying to take a bit of a step back and look through some of the noise, to look at the longer-term trends that aren’t captured in our [statistical] modelling,” she said. 

“In this role, I’m going to be not shying away from covering these trends, but also [asking] what governments should be doing in that space.”

Promoting resilience and adaptation

Since then, Young has published two thought leadership papers that do precisely that.

The first examines the issue of narrowing the education-occupation gap for newcomers to address Canada’s labour crunch. The second, published in early 2023, is an in-depth look at housing affordability in Canada, where Young argues that a doubling of our current social housing stock would help those most in need. 

“The moral case to urgently build out Canada’s anemic stock of social housing has never been stronger,” argues Young. “The economic case is equally compelling.

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Themes align with Scotia’s priorities

In addition to promoting resilience so households, firms, and the broader economy, adapt and thrive in an evolving global context, Young’s thought leadership work also amplifies some of Scotiabank’s key priorities, including Net-Zero Pathway and ScotiaRISE commitments.

Young joined Scotiabank in 2019 as Director, Fiscal & Provincial Economics, leading the bank’s work on provincial and federal economic and fiscal forecasts, public policy issues and the global auto sector.

She holds a B.A. in Chemical Engineering from McGill University, an M.Sc. in Environmental Policy from the London School of Economics in London, England, and an MBA from INSEAD in Fontainebleau, France and Singapore.

Young recently shared her thoughts on newcomers, the economy and the housing crisis with Prepare for Canada:

In your first published report in your current (and unique!) thought leadership role at Scotiabank as head of inclusion and resilience economics, you noted that it is essential that Canada narrow “the education-job mismatch for newcomers.” Can you explain?

Newcomers are increasingly coming to Canada highly educated and motivated to contribute but often occupy positions that do not leverage their learning. Whereas two-thirds of newly arrived immigrants hold university degrees, only about 40 percent work in jobs requiring them, versus 60 percent of Canadian-born peers.

These have important implications for these households, including a substantial hit to income. It can also impact job security and satisfaction. 

It also represents a loss to the Canadian economy as this skills-job mismatch represents untapped potential. Output is simplistically defined as hours worked times the productivity – or the tools and training – of the labour force. The education of these newcomers is not fully leveraged in the workplace. Narrowing these gaps should be a win-win. But the reasons behind mismatches can be complex and diverse, ranging from credential recognition and Canadian experience to language or cultural barriers, to cite just a few. 

This means there is no panacea: it will take a host of approaches from policymakers and employers alike to address some of these barriers.

Our main message is “it’s worth it.”

Based on what you’ve learned so far in your role, what more could Canada be doing to help the hundreds of thousands of newcomers projected to arrive between now and 2025 integrate more smoothly and productively into the Canadian labour force?

Canada could be more strategic regarding the sectors favoured in its policy frameworks and selection procedures. 

Vacancies across the economy exceed the number of newcomers that are expected. But vacancies are not always a reliable indicator of which positions will contribute the most to the economy or which will best leverage the skills and training of newcomers. The system should reward those who invest in the tools and the training to drive sustainable growth.

Experience is also demonstrating the value of both pre-and post-arrival support.

Pre-arrival support cannot overemphasize the diversity of the country. Canada could help potential newcomers navigate this complexity and optimize their decisions based on their own individual needs. Regions differ regarding jobs, wages, house prices, taxation and language, among other considerations. Traditionally, newcomers are attracted to the largest city centres, but increasingly smaller towns and cities are offering hidden advantages to newcomers.

Post-arrival support could also extend beyond the weeks and months following arrival to the years. In addition to practicalities, Canada could also support newcomers achieve longer-term career ambitions and achieve greater financial security in their new country. 

In my earlier report, I suggested a “learning passport” that would provide the tools, resources, and accountability to progressively narrow any mismatches or potential wage penalties in the labour market and help
newcomers meet their full potential over the medium term.

Despite inflation, rising interest rates and talk of a recession, the Canadian job market remains robust for immigrants looking for work and careers. What do you see developing in 2023 regarding the labour market?

Canada – much like the rest of the world – is facing highly unusual economic times. We anticipate the Canadian economy will experience a shallow recession in the early quarters of 2023 as high-interest rates intentionally slow demand with inflation still uncomfortably high. But this should be more of a pause versus a deep retrenchment, and we should see interest rates starting to come back down towards the end of the year, which should bode well over the medium term as activity starts to pick back up.

Labour markets have so far defied historical expectations. Canada continues to add jobs (and lots of them) despite this backdrop of high-interest rates and recession fears. The number of jobs sitting vacant is also still almost double where they were before the pandemic as businesses struggle to fill positions. We expect this situation will ease modestly in the year ahead against a slowing economy, but not substantially. 

Structural forces (are) at play in Canada. One in five of our labour force is approaching retirement. Employers are likely calculating both a short-lived recession, along with a longer-term outlook for persistent labour shortages and should be reticent to let talent go.

For newcomers arriving in such a period, it obviously adds a degree of uncertainty. There will also be different impacts across sectors and regions which suggests flexibility may be warranted. But for such a life decision, it is difficult to time the economic cycle versus taking a longer-term perspective. 

Keep in mind that much of the world is slowing in 2023, with labour markets around the globe facing similar headwinds. Canada is likely to lead the pack in terms of growth among advanced economies, even if it is low by historical standards.

Housing affordability and ever-rising rent prices are hot topics right now in Canada, particularly again, with so many newcomers arriving who will need housing. Are we on the right path in terms of solutions?

National house prices doubled over the course of the pandemic from already-high levels. Interest rates have taken a bite out of prices, but they are still above pre-pandemic levels and remain unaffordable for the average Canadian. A chronic shortage of housing – both owner-occupied and rental units – means that renting does not provide much reprieve. 

Unfortunately, we are not likely on a path that would shift this landscape in any meaningful timeframes that would translate into better affordability for newcomers. Construction takes time, and there are plenty of policy barriers (and labour constraints) still impeding progress. It is an urgent issue for newcomers and Canadians alike, particularly those earning lower incomes, that needs to be addressed by governments at all levels. 

That said, there are very big variations across Canada in the cost of accommodations. This should not be overlooked in making decisions on where to live or relocate since the cost of living in one city can easily overwhelm what otherwise may seem to be a higher wage offered in that particular region in isolation. There are also increasingly innovative approaches to housing that could be explored that could reduce the burden of shelter costs.

Shifting to a more global, long-term focus, what are the evolving economic trends, and how might they affect Canada going forward?

Rapidly aging demographics are a trend that all advanced economies are facing. Increasingly there is likely to be greater competition for immigrants as labour forces are hallowed out and growth prospects slow. Canada is ahead of the curve: it has long-embraced newcomers as part of its economy and its broader social fabric.

But Canada will need to address near-term challenges that may erode its early advantages. As competition for talent heats up, factors like housing affordability, tax structures and social support will increasingly matter. Canada must urgently address these issues if it wants to retain its status as a destination of choice for potential newcomers.