The Canadian labor market can become stable through immigration. Apart from this, immigration can also fight the inflation period successfully. Bank of Canada’s governor stated before the media about the role of immigration in bringing a balance in the labor market of Canada. The media released his statements from his recent speeches held on November 10 and 14.
He spoke on the current challenges concerning jobs and the future of workers in Canada. Also, he talked at length, addressing the following questions:
- What is the reason behind businesses failing to find sufficient workers?
- Is there a possibility of a recession?
- If it’s a recession, does it imply a higher unemployment rate?
- Does the Bank of Canada play a significant role in helping sustainable employment (at the maximum level)?
The connection between the Canadian labor market, immigration, and inflation
In his two recent speeches, Tiff Macklem, the Governor of the BoC, spoke in detail about welcoming more workers to balance the Canadian labor market and address the inflation challenge.
Macklem started by talking about immigration and how there is more demand in Canada’s labor market compared to the labor supply. The governor further claimed that the existing labor shortages have increased pressure on wages across Canada. Furthermore, the shortage caused inflation to shoot up like never before. Therefore, Macklem shared his opinion of continuing to recruit more immigrants. He told Canadian employers to focus more on recent immigrants to fulfill the increasing labor demand and fight inflation.
He went on to say that to balance the labor supply and demand; they must increase the supply of workers. According to him, recruiting more immigrants is crucial to regulate wages. The Bank of Canada revealed that it is essential to slow down wages to control inflation.
Canadian immigration- evaluating its actual state since 2020
In 2020, Canada faced a downward situation due to the rise of the pandemic and failed to meet the target of welcoming 100,000 workers. However, currently, immigration is doing well because there are no border restrictions.
The Immigration Levels Plan for 2023 to 2025 makes it evident that immigration has returned to its normal state. The standard targets for 2023, 2024, and 2025 are 465,000, 485,000, and 500,000, respectively.
Canada is ready to embark on new targets fixed every three years by the Canadian government. It is all set to restore the immigration levels.
Future plan for immigration
Canadian immigration will help regain the balance and stability of the labor market in Canada and control inflation compared to other countries across the world. The intense immigration levels demonstrate that immigration will play a vital role in the final Canadian output. Considering Canada’s potential, whatever expected result will largely depend upon immigration because it will contribute to at least two-thirds of the growth.
Moreover, immigrants account for the maximum potential workers within the Canadian workforce. They help fight back against the drastically reduced rate of workers within the workforce. Consequently, they provide solutions to Canada’s existing and rising economic challenges.
Conclusion
To get your hands on Macklem’s complete transcript of his speeches on November 10 and 14, you can visit the Bank of Canada’s official website.
