- July 16, 2021
- Posted by: Clearport Team
- Categories: Clearport, Employers, General, Human Capital Management, News, Recruitment
Unemployment goes down, Pre-COVID labour shortages will persist, and the Economy recovers. This will create the need (again) for Temporary Foreign Workers.
Several sources indicate that in Canada, as COVID-related restrictions are eased or lifted altogether and the economy bounces back, unemployment will decrease steeply; that the demand for workers will increase sharply, particularly in those sectors and kinds of jobs that many Canadians are not that interested in; and -after COVID- Temporary Foreign Workers will continue to fill growing gaps of Canada’s aging population, as they historically have.
According to the June 2021 Labour Force Survey from Statistics Canada, as Canada starts lifting or easing COVID-related restrictions, unemployment went down in the country compared to May 2021:
“Employment rebounds in June as some restrictions are lifted. Employment rose by 231,000 (+1.2%) in June… The unemployment rate fell 0.4 percentage points to 7.8%… as the total number of unemployed Canadians fell by 61,000 (3.7%)”
Source: June 2021 Labour Force Survey, Statistics Canada
From the same source, some other key data about employment rates in June 2021 vs the May 2021 indicate that the Retail and the Accommodation and Food industries will offer more job opportunities, particularly for Full-Time Students. Some highlights from the June 2021 Labour Force Survey from Statistics Canada are:
- Full-time Students aged 20 to 24 that intend to return to school in September saw their June 2021 employment rate grow to 67.5%, similar to the historical average for June (68.0%), with gains mostly in industries that recently had COVID restrictions eased or lifted, and which typically employ students (i.e., retail; accommodation and food services; and information, culture, and recreation).
- The accommodation and food services industry added 101,000 jobs, +11.8%. The average wage per hour in this industry was $17.35.
- The retail industry added 75,000 jobs, +3.4%.
- The number of people in the labour force grew by 170,000, +0.8%. (this includes those employed and those unemployed but looking for a job).
- The number of people that were employed but worked less than half their usual hours decreased by 276,000, -19.3%.
“41,000 more Chinese Canadians and 31,000 more Filipino Canadians were employed in June.”
Source: June 2021 Labour Force Survey, Statistics Canada
In its April “What to make of the Canadian Job Data” report, CIBC Capital Markets says that “what the data remind us is that sectors like retailing and other services are very labour intensive. If, by year end, progress against COVID allows us to have bars, gyms, and restaurants up and running, and more hotel rooms and plane seats filled, that can generate a steep dive in the jobless rate in a hurry.”
Right now, based on the January 2019-June 2021 trendline, Canada has a gap of about 850,000 jobs, according to Acus Consulting.
Although the Canadian economy started a recovery in the second part of last year, the June 2021 unemployment rate still shows a gap of about 850 Thousand jobs that need to be filled. That is a big whole to fill, but it can grow even larger, and quickly, if the economic recovery exceeds expectations or happens more quickly than anticipated. It is clear that many of these jobs will have to be filled by Temporary Foreign Workers. As restrictions continue to be lifted in Canada and the economy improves, many Canadians will continue to pursue different interests than their pre-pandemic jobs, which will increase Employers’ demand and the number of positions to fill.
As already mentioned, this is supported by structural reasons, including Canada’s aging population, as well as a continued disconnect on the jobs actually available (demand) and those that Canadians want to do (career preference).
Pre-COVID Labour Shortages will Persist, and Potentially Expand
In a recent article, Canada’s Financial Post says that unemployment, which increased due to the COVID pandemic, did not actually start with it, and comments about various sources that confirm this. For example, it mentions that the Bank of Canada’s 2021 Spring Business Outlook Survey indicates that labour constraints preceding COVID are starting to return, and that businesses are still struggling nowadays to find workers for the same types of jobs than before COVID, like skilled trades and technology. It also quotes Jennifer Lee, Senior Economist for BMO Economics, saying that “many firms expect these constraints to persist”.
The Financial Post’s article continues to point out that all surveys evidence that finding workers that are qualified, or actually any workers, is among the biggest hurdles for businesses in Canada.
As another example, the articles says that CFIB, the Canadian Federation of Independent Business, says that 38% of surveyed businesses reported difficulties to hire skilled workers, and that this is most common barrier to growth in terms of sales or production. Corinne Pohlmann, CFIB’s Senior Vice-President of National Affairs, indicated that many jobs in the trades “actually pay quite well…but I think there is sometimes a stigma around these jobs.”
The Financial Post’s article explains that this stigma that jobs in the trades have among Canadians, especially in the construction sector, is to blame for a reducing interest among newer generations of students, who are preferring to opt for a University degree rather than enrolling in Trade Apprenticeships and College Trade-oriented courses.
The article quotes Mary Van Buren, president of CCA, the Canadian Construction Association, saying that “a career in construction has not been a first choice for many people… There has been a bias toward people going to University.”
This indicates that Canada will face growing labour shortages in jobs in the trades, such as carpenters, electricians, plumbers and many more.
Confidence is growing among Canadian businesses
The Bank of Canada recently released its Summer 2021 Business Outlook Survey (BOS).
BOS is an important indicator for Canada’s economy, being a summary measure of the main survey questions that gauges overall business sentiment.
The survey shows that confidence in an improved economic outlook is growing among Canadian businesses.
Results from latest edition of BOS indicate a continued improvement in business sentiment. Although some businesses will still have challenges, they are increasingly confident that sales will grow as a result of increased vaccination coverage and easing of COVID-related restrictions.
Source: Summer 2021 Bank of Canada BOS
A majority of surveyed businesses reported improved sales prospects compared to last year, and growing confidence that restrictions will be lifted soon. Businesses in Canada expect that wages, input prices and output prices will grow more quickly than a year ago, as a consequence of healthy or improving demand.
Source: Summer 2021 Bank of Canada BOS
As shown in the chart above, expected demand growth among businesses in Canada has bounced back sharply in the summer of 2021, following a deep low during the peak of the COVID pandemic in the Summer of 2020 (which was even deeper than during the 2008 world crisis).
As businesses expect a sharp growth in demand, some reported other capacity pressures. Supply chain frictions are expected as a key bottleneck to production, although temporary. Supply problems or shortages issues were expected for a broad spectrum of finished goods and raw materials, with an increase on constraints regarding shipping capacity as a contributing factor; a majority of businesses expect that these constraints will continue through 2021.
Source: Summer 2021 Bank of Canada BOS
Temporary Foreign Workers to Play a Key Role
Importantly, as indicated by the Financial Post’s article, Immigration has historically allowed Canada to fill gaps not only in the construction industry but also in many others. As mentioned in the article, for example, many Provinces across Canada are desperate for service workers as they reopen, with CIBC Economist, Benjamin Tal, affirming that “Canadians, in general, look down on trades jobs despite how badly the country needs them. Unless that changes, those crucial positions will keep going unfilled”.
In an excellent article (“How to build a better Canada after COVID-19: Rethinking immigration can boost the economy”) published online by The Conversation, the author, Anna Triandafyllidou, points out that Immigration is a key strategy to address Canada’s aging population and declining domestic birthrate. She also offers intriguing ideas on how Canada can use Digital Work Permit and SIN processing, and even explore the advantages of allowing remote work by Temporary Foreign Workers while COVID restrictions are fully lifted. This strategy can be useful, for example, to fill needs for IT workers across many industries.
Triandafyllidou, appointed Canada Research Excellence Chair in Migration and Integration in 2019 by Ryerson University, indicates in her article that
“Canada faces a potential crisis if its borders remain closed to people for a prolonged period of time”
Source: The Conversation
As shown in her article, the Government of Canada has acknowledged that Immigration is crucial for Canada’s future, in particular for economic growth. When the Government announced its immigration plan in 2018, it set ambitious goals, including 341,000 new immigrants in 2020 and 350,000 in 2021. These goals have not been met.
75% of Canada’s population growth comes from Immigration, and that without Immigration, by 2035 -when 5 Million Canadians will retire- the Workers/Retirees ratio will be 2 to 1, sharply down from a 7 to 1 ratio in 1971. In order words, Canadians will not be able to retire without economic and population growth supported by Immigration.
Source: IRCC Canada
The pause imposed by COVID in many economic activities is temporary. Without Immigration, pervasive long-term population trends will stifle the Canadian economy.
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Public Opinion is In Favor of Opening Borders -safely.
The decision to open the borders or not appears to be a balancing act between satisfying economic realities (reopening the borders is critical for the economy) and catering to public opinion that prefers public health before economy and jobs.
According to a National Survey released by Nanos in July 2021 (for CTV News and The Globe & Mail), when asked “When should Canada eliminate all pandemic-related restrictions on travel across the U.S. border”, 63% of Canadians think that Canada should do it soon (15% Immediately, 14% this Summer, plus 34% this Fall), with 21% Unsure.
Only 16% of those surveyed think that the Canadian Government should wait until next year.
However, the same survey found that
“A strong majority of Canadians say that public health is more important than the economy and jobs when it comes to making decisions about the opening of the Canada-US Border. Residents of the Prairies were more likely to say the economy and jobs is more important (32%) than Canadians overall”
However, the apparent binary choice between economy and jobs and public health on the other is actually false.
Both goals can be achieved simultaneously thanks to Canada’s quickly growing vaccination coverage.
Meanwhile, Pressure Grows On Canada To Reopen Its Border
CTV News reports that “The Canadian border remains closed to foreigners, with a few exceptions, and will be until at least July 21. Ottawa has extended the closure, month after month, since the beginning of the pandemic in March 2020.”
Interestingly, in the same article the News outlet indicates that France is urging Canada to reopen its border to the French nationals, as France already opened its borders to Canadian tourists.
“The consequence of the border closure is that there are no more visits,” Rispal said. “There are no more ministers. There are no more parliamentarians. There are no visits by manufacturers. There are no visits by artists — relationships need to be worked on every day, to nourish them.” Kareen Rispal, representative of France’s President Emmanuel Macron’s government
Source: CTV News
And France is not alone -the U.S. is also mounting pressure on the Canadian Government to open its border.
Per the Washington Post, “a growing number of lawmakers, residents and business groups on both sides of the world’s longest undefended border are out of patience.”
“U.S. lawmakers from across the political spectrum have pushed Biden to open the U.S. side unilaterally, a step that might be viewed as not so neighborly, after a year in which officials on both sides have pointed to their work on the border measures as an example of close cooperation.”
Source: The Washington Post
Also according to the prestigious U.S. Newspaper, although the Government of Canada has repeatedly referred to a “phased” plan to ease its border restrictions, based on vaccination rates, COVID-19 cases and hospitalizations numbers, nothing concrete has been announced.
Several sources indicate that on June 21 Canada may announce a more concrete, specific plan with a reopening date t happen soon.
In a June Media Release, the Canadian Chamber of Commerce pointed out that “The fact that it is easier for vaccinated Canadians to fly to Paris than it is to drive to Buffalo demonstrates how illogical the present policy is. It is time for common sense, guided by science, to dictate a well-considered reopening plan.”
In a separate CTV News article published on June 14th, it is reported that business leaders in Canada have demanded a concrete Government plan to immediately reopen both its borders and its economy. The article states that a Canadian travel and tourism roundtable said the federal government must heed advice from its expert advisory panel last month and allow fully vaccinated foreigners into the country
The Chief Executive Officer of the Canadian Chamber of Commerce, Perrin Beatty, was quoted calling Canada a G7 “outlier” because it has not published a detailed reopening plan in accordance to its vaccination rates and other criteria.
“We are well behind other countries. The great irony here is that Canada is a world leader when it comes to first shots, first vaccinations. And yet we’re a world laggard when it comes to having a plan for reopening”… “At some point government has to decide whether being vaccinated is meaningful”… “We need a plan. We need it now. And everybody needs to know what it is.”
Perrin Beatty, Chief Executive Officer, Canadian Chamber of Commerce
Source: CTV News
And Universities Pressure, too
Although Universities and Colleges in Canada have not publicized a collective position (remember, many are publicly funded either in part or in full), it has been confirmed through various sources that these institutions are quietly putting pressure on both their Provincial Governments and the Government of Canada to reopen the border to International Students.
With so much of their Tuition and Fees revenue hanging on International Students and their number dropping 17% in 2020 vs . 2019, it is no surprise that Universities want clarity in Government travel International Student policies related to COVID, and to resume their regular intake this Fall.
An article by Jennifer Brown says that, as of July 2021, over 80% of Canadian Universities and Colleges have announced their Fall COVID plans, after more than a year of trying to remain financially viable (International Students would have represented over 50% of all student fees paid in 2020-2021).
Post-Secondary institutions and International Students alike need clarity to plan and to make decisions, and they expect the Government of Canada (and Provincial Governments) to coordinate and define the plan now.
The above article says that this Fall, more than 48% of these superior education institutions will deliver programs in-person, that 30% will do so using a hybrid model, and that around 17% have not yet announced their plans.
As already mentioned, if vaccination and science are to guide decisions about this, it is clear that Canada can safely reopen its border to fully vaccinated International Students without the need of a costly quarantine. Canadian Colleges and Universities desperately need these students, and the Canadian economy would certainly benefit as well.
Canada is increasing its COVID Vaccine Coverage extremely quickly, meeting ambitious goals.
Canada has a population of just 38 Million, so its daily vaccination is impressive.
In 7 days, Canada administered 2.7 Million doses, an average of over 391 Thousand per day.
Source: COVID-19 Tracker Canada
When comparing how many doses each country administers daily per 100 people, Canada’s current pace of vaccination is also above China, France, Germany, Australia, the United Kigndom, India and the United States, as shown in the table below:
Source: Our World in Data
Canada’s daily vaccination pace is not only enormously quick; most importantly, it adds to a strong vaccination coverage Canada has already achieved.
Canada has vaccinated almost 69% Total Population with at least one dose, and fully vaccinated almost 40%.
In terms of Eligible Population (those 12 years old or older), Canada has vaccinated almost 78% with at least one dose, and fully vaccinated over 45%. See table below:
Source: CTV News with data from Statistics Canada
Canada Leads Among Key Countries in % of Vaccinated People
Canada is above the United Kingdom, Germany, the United States, France, China, Australia and India in Share (or percentage) of People Vaccinated) against COVID-19. This statistic considers, for each country, the percentage of people fully vaccinated plus percentage of people that have received at least one dose. See the following chart:
Source: Our World in Data
Good Vaccine Coverage in Canada continues to grow. Mandatory Masks and Border / Travel Restrictions are eased. Expectations for Canada’s Economy improves along with outlook for Jobs and International Students Jobs.
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