Labour shortage has Canada planning to pick and choose immigrants

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Canada, which relies on immigrants to grow its workforce, plans to start targeting newcomers in specific occupations to ensure better matching with industries suffering the most intense labor shortages.

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The open-door nation will start being more tactical in choosing permanent residents in 2023, giving preference to specific skills or labour-starved regions, according to Immigration Minister Sean Fraser.

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The new approach will see Canada try to handpick newcomers for hard-to-fill jobs. Construction, engineering, food services and health care organizations are struggling the most to find enough workers, government data show.

Canada’s existing system has resulted in many immigrants failing to find jobs that match their skills and the economy not harnessing the full potential of a highly-educated workforce.

“If you have incredibly skilled people who are coming into an area where there aren’t great needs in the labour force, those people end up doing other work,” Fraser said in an interview. The intent of the change, he added, “is to use our immigration system as a scalpel instead of sledgehammer.”

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Canada aims to bring in more than 1.3 million permanent residents over the next three years, a record number. The targeted selection process, which will be led by Fraser, will complement the existing Express Entry program. Under that system, a pool of immigrants is ranked based on their age, education, work experience and language competencies, and the highest-caliber candidates are invited to settle and seek employment in Canada.

Gaps and inefficiencies

The new initiative comes amid calls from business groups and one of the country’s largest banks for Prime Minister Justin Trudeau’s government to do more to address labour shortages and inefficiencies of the immigration system.

“If there are shortages of health care professionals in Nova Scotia, we will be able to draw down on the highest ranking health care professionals that are destined for Nova Scotia,” Fraser said. “If we’re looking for skilled tradespeople in Southern Ontario, then we’ll be able to do a targeted draw for those kinds of workers in that particular sector.”

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Last week, the Bank of Nova Scotia warned that recent immigrants are far less likely to work in positions that leverage their training despite being more likely to have university degrees than Canadian-born peers. Those working in jobs below their credentials can face a wage penalty of more than 40%, Rebekah Young, the bank’s head of inclusion and resilience economics, said in a report.

That job-skills mismatch for immigrants, along with a housing affordability crisis and strained health-care system, will be key challenges for Canada in attracting newcomers as many advanced economies — facing aging workforces and declining fertility rates — increasingly compete for young, highly-educated migrants.

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In a survey of 500 newcomers published this month by Publicis Media and the Angus Reid Institute, 30% of respondents who were able to find a job said they had to take on a lesser role, while 67% said they’re currently seeking a better position in the near future. About half of those surveyed said they might or will leave Canada, with many stating that Canada fell short of expectations in housing, the cost of living and accessibility of health care.

“As the world economies open, we’re all competing for the same pool of talent to fill common gaps in our labour forces,” Fraser said. “The countries that figure out how to embrace immigration are going to exit the pandemic with a stronger economic recovery. And I want to ensure that Canada is on the front end of that wave.”

While the details and the start date of the targeted draw aren’t yet finalized, the minister said he has started consultations with provinces and stakeholders. Their focus will be on both addressing short-term labour needs and preparing for growth in sectors that will be in demand over the next several decades.

“We need to make sure that the people who get here are able to fulfill their own potential and also fill key gaps in the Canadian economy,” Fraser said.

Bloomberg.com