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TOP STORY
The share of native-born Canadians in the labour force has dropped nearly 10 percentage points since 2006, according to
documenting how the country’s economy is becoming increasingly reliant on low-wage migrant workers.
“Not only has Canada experienced an unprecedented surge in immigration, but the composition of recent newcomers has been markedly different than in the past,” reads a discussion paper published May 9 by the bank’s Economic Analysis Department.
The paper found that, driven largely by a surge in temporary migration, the average Canadian immigrant has now become younger, lower-skilled and more likely to hail from poorer regions such as India, sub-Saharan Africa or the Middle East.
They’re also paid less. Particularly among Canada’s surging ranks of temporary migrant workers, wages have “reduced significantly relative to Canadian-born workers,” reads the paper.
Since 2015, “the average nominal wage gap between temporary and Canadian-born workers has more than doubled,” it read.
The authors calculated that the average migrant worker in Canada is now paid more than one fifth (22.6 per cent) less than a comparable Canadian-born worker. Prior to 2014, that gap was only 9.5 per cent.
The paper, entitled The Shift in Canadian Immigration Composition and its Effect on Wages, is one of the most definitive official documents as to the massive surge of migrant workers brought to Canada in the immediate wake of the COVID-19 pandemic.
Starting in 2022, Canada began accepting more than one million newcomers per year, mostly in “non-permanent” categories of immigrants ranging from international students, who are among those admitted under the international mobility program, to temporary foreign workers.
The Bank of Canada document shows that this wasn’t just unprecedented for Canada, but it went well beyond the pale of any comparable advanced economy.
Between 2019 and 2023, Canada charted population growth of more than six per cent. This was triple the rate seen in the United States, and double the rate seen in Switzerland, the only other developed economy analyzed by the paper whose demographic shift came anywhere close to those of Canada’s.
The paper casts this as being out of character for Canada, whose immigration flows are “generally stable and predictable over history.”
Right up until 2015, in fact, Canadian population growth was almost entirely unaffected by what statisticians refer to as “non-permanent residents.” Any immigration into Canada was via permanent channels, with the “NPR” cohort so small that any new temporary immigrants entering the country were usually cancelled out by the ones leaving.
By mid-2024, non-permanent residents were representing “almost two-thirds of population growth” in what the study called a “sharp divergence” from the norm.
Temporary migrants were also coming from different places. Between 2006 and 2014, the region providing the highest level of non-permanent immigration to Canada was Northern and Western Europe. As of 2024, it’s India. “An increasing number of NPRs have been migrating from lower-income regions,” it reads.
This all happened simultaneous with the cratering of Canadian “net births.” That is, the number of births minus the number of deaths.
Net births were the primary driver of population growth in Canada as recently as the early 1990s. By 2024, notes the paper, they became “negligible.” In other words, the number of Canadian babies born in that year were virtually equivalent to the number of Canadians who died.
The paper also documents a marked decrease in the share of Canadian-born workers making up the labour force.
In 2006, the share of Canadian-born workers in the labour force stood at 77.6 per cent. As of 2024, notes the paper, this had dropped to 68.1 per cent.
Canada’s post-pandemic surge in migrant workers has corresponded with a massive uptick in youth unemployment.
Particularly among retail and food services — two sectors that traditionally relied on part-time, entry-level workers — employees are now increasingly in the country on temporary work visas.
A November report by King’s Trust Canada found that between 2016 and 2023, the rate of temporary foreign workers in Canadian restaurants increased by 634 per cent.
The authors of the Bank of Canada report do not touch on how high immigration is altering unemployment rates, but they do surmise that the trend could be affecting Canada’s overall productivity — that is, how much the average Canadian worker is able to produce.
Canadian productivity has plunged into sharp decline in recent years, with each passing year yielding a lower rate of per-capita GDP than the year before.
Analysts have previously suggested that this trend is likely being exacerbated by Canada’s surge in cheap, low-skilled temporary labour. In 2023, former Bank of Canada governor David Dodge warned that a “large and rising inflow of workers with lower skills” was serving to depress wages and prop up “uncompetitive” businesses.
The new Bank of Canada discussion document says that dropping wages among “non-permanent workers” could be a sign that “the productive capacity of the Canadian economy grew less than it would have if recent newcomers had the same socio-economic characteristics as in the past.”
IN OTHER NEWS
The NDP’s first legislative goal has already failed.
The party won just seven seats in the April 28 election, which means they fall well short of the 12 seats needed to obtain official party status. This is a big deal for the NDP, since the various perks and subsidies that come with official party status are essentially the only revenue for their otherwise-broke political organization. So, interim leader Don Davies’ plan was simply to ask that they be given official party status anyway. The Liberal government’s answer to that, announced this week,
Canada’s newest Speaker of the House is Quebec Liberal MP Francis Scarpaleggia. He benefits from pretty low expectations for the job; provided he
doesn’t invite a retired Nazi to Parliament
or
immediately plunge into a bunch of ethical scandals
, he’ll probably be fine. In his first address as speaker, Scarpaleggia advised the new Parliament to
“only speak when you have something intelligent to say.”
A common argument among anti-monarchists is that Canada has a head of state whose loyalties may lie with a foreign nation whose interests may not necessarily be in line with those of Canada. And indeed, the awkwardness of King Charles III’s various titles was highlighted this week by the fact that U.K. ministers
Prime Minister Mark Carney not to do anything with the King that might enrage U.S. President Donald Trump — and thus jeopardize British trade relations with the U.S. The British government isn’t really allowed to do that; King Charles III’s position as King of Canada is entirely distinct from his other king jobs, and the U.K. government no longer has any constitutional authority over his Canadian duties.
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