Newcomers must understand Canada’s job market before and after arrival to make it easier to find a job. According to Statistics Canada’s latest labour force survey (August 2024), recent immigrants and students are the hardest hit by Canada’s job market slowdown.
However, unemployment rates for those born in Canada and immigrants who have been here for a while were basically unchanged in August.
This recent job market data continues a trend from July, showing that more recently arrived permanent residents are being affected by the slowing economy, which many economists partly blame on an oversupply of temporary foreign workers and international students.
Still, Derek Holt, Scotiabank’s Vice President and Head of Capital Markets Economics, says, “The country’s job market remains resilient!” According to Holt, Canada’s gain of 22,200 jobs in August was close to most estimates.
Healthcare Sector Added Jobs in August
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The August unemployment rate increased from 6.4 percent in July to 6.6 percent in August. Again, said Holt, this was in line with expectations. Canada’s unemployment rate has risen from a low of 4.8 percent in July 2022.
Job market sectors that saw growth include:
- Health care and social assistance
- Educational services
- Finance, insurance, real estate, and leasing.
However, there were job losses in the professional, scientific, and technical services, utilities, and natural resources sectors.
Job gains in August were mainly in Quebec and Alberta while Ontario lost 8,000 jobs.
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Job Market Wage Growth Continues
Despite the slowdown in hiring, Canadian workers continue to see rapid wage growth, and many have seen their earnings return to pre-pandemic purchasing power. In August, average hourly wages rose five percent to $36.15 from a year ago. However, wage growth for recent immigrants has been flat.
Full-time positions fell by 44,000, with part-time jobs up by 66,000. This, said Holt, reflects volatility in Canada’s job market more than anything else. For example, full-time jobs surged by 62,000 in July, while part-time jobs fell by 64,000.
Youth employment was flat. Meanwhile, the 25-plus age group gained 23,000 jobs, primarily among women (19,000), with men 25-plus gaining 4,000.
The number of unemployed people rose to 1.5 million in August, a 22.9 percent jump from August 2023.
Changes in the Canadian Job Market by Sector
| INDUSTRY | % CHANGE JULY TO AUGUST 2024 |
|---|---|
| Agriculture | 0.6 |
| Natural Resources | -1.8 |
| Utilities | -4.5 |
| Construction | 0.2 |
| Manufacturing | 0.6 |
| Wholesale and Retail Trade | 0.5 |
| Transportation and Warehousing | 0.1 |
| Finance, Insurance, Real Estate, Rental and Leasing | 0.8 |
| Professional, Scientific and Technical Services | -0.8 |
| Business, Building and Other Support Services | -1.2 |
| Educational Services | 1.7 |
| Health Care and Social Assistance | 0.9 |
| Information, Culture and Recreation | 0.0 |
| Accommodation and Food Services | -0.9 |
| Other Services (Except Public Administration) | -2.3 |
| Public Administration | -0.5 |
Hourly Wages Rose for Established Immigrants
Statistics Canada says the average hourly wage growth for immigrants who have settled in Canada since 2019 fell by 1.3 percent annually. However, more established immigrants saw their average hourly wages rise by 6.3 percent over the same time.
Canadian-born workers’ wages rose six percent over that period.
According to Holt, Canada’s wage growth has exceeded inflation since the beginning of the pandemic.
“The make-up pay argument is a load of horse pucks,” said Holt. “Wages are outpacing inflation and real wages are outpacing terrible productivity.”
He said this remains a cause for concern around inflation, which currently sits at 2.5 percent.
Wage growth remains elevated, which indicates sustained demand for workers
Brendan Bernard, Indeed Economist
While Canada’s population grew by 96,000 in August, the job market added 22,000 jobs.
According to Statistics Canada, the summertime unemployment rate for youths aged 15–24 was 16.7 percent. That’s the highest it has been since 2012 and higher than 12.9 percent in August 2023.
Youths continue to encounter the most significant job challenges.
The 15–24 unemployment rate has risen by 5.2 percent since July 2022.
Adult Employment Remained Stable
Black, Chinese and South Asian students faced considerably higher unemployment rates in the summer job market.
Black students had the highest unemployment rate, 29.5 percent, up 10.1 percent from the summer of 2023.
The unemployment rate for men 25 and older is up just 1.4 percent, and for women 25 and older, it’s up only 1.0 percent.
Economists attribute even this small rise in adult unemployment to the impact of non-permanent residents (temporary foreign workers, international students, and refugees) on the Canadian job market.
Job Market Has Mostly Avoided Layoffs
“Canada overshot on immigration,” said Holt, “with too much too fast relative to the ability of the country’s job market and infrastructure to absorb so much.”
In assessing the job market report, Royce Mendes, head of macro strategy at Desjardins, noted, “The only silver lining (in the report) was that rising joblessness continues to be driven by new entrants not finding work rather than existing workers losing their jobs.”
Construction Labour Shortage Continues
The August unemployment numbers followed another interest rate cut by the Bank of Canada to 4.25 percent. This was the third cut in four months, and the Bank will likely make more cuts.
Economists say the goal of the interest rate cuts now seems to have shifted from fighting inflation to bolstering a slowing Canadian economy.
Labour shortages continue in several key sectors. A new Desjardins report finds that the ongoing labour shortage in the construction industry is the “primary constraint” stalling badly needed new housing starts.
Some Employers Have Reduced Hiring
The Canadian Home Builders’ Association says the industry needs more than one million additional residential construction workers to meet housing targets.
However, Matt Lundy in the Globe and Mail points out that some Canadian employers have cut back on hiring as interest rates remain high despite the recent cuts.
Also, the number of non-permanent immigrant job seekers remains strong as businesses and politicians wait for the recent government-imposed quotas on temporary foreign workers and international students to take effect.
Job Market Outlook for Fall 2024
For the remainder of 2024, newcomers should pay attention to job market trends that can affect their job search such as:
- Rising unemployment
- Decreasing tech jobs
- Increasing wage growth.
“Wage growth remains elevated, which indicates sustained demand for workers,” said Indeed job site economist Brendon Bernard.
So far, the Canadian economy has not seen a wave of mass layoffs, which would increase the unemployment rate and weaken the need for workers. However, many sectors (health, education, construction, etc.) continue to hire, which is good news for newcomers arriving in Canada this year.
“This should give job seekers reason for cautious optimism,” said Bernard, who predicted that Canada will remain attractive to foreign job seekers.
Summary:
For newcomers seeking work, it’s vital to pay attention to changes in the Canadian job market. While Canada added 22,000 jobs in August, the unemployment rate at 6.6 percent has been slowly but steadily rising. Recent job market changes have made it hard for recent immigrants and youth seeking work, but employment has remained stable in the core 25-54 age group.
Canada has now put caps on temporary foreign workers and international students to shrink that non-permanent workforce demographic. Meanwhile, wage growth continues to outpace inflation, raising fears of higher inflation, which could impact job creation. Newcomers should pay attention to inflation and interest rates as these impact the Canadian job market.
SOURCES:
Statistics Canada, Scotiabank Economics, Canadian Press, Globe and Mail, Desjardins
Steve Tustin is the Editor for Rentals for Newcomers and a contributing editor for Prepare for Canada. He is also the former managing editor of Storeys.com and a former senior editor at the Globe and Mail and the Toronto Star.
© Prepare for Canada 2024
