|
Lower immigration expected to result in higher wages
Editorial by Christian Saint Cyr
National Director / Canadian Job Development Network
.
The Conference Board of Canada recently reported that as immigration continues to slow, we can see a corresponding increase in wages. Not only will people be earning more, but we can also expect the unemployment rate to fall as well.
.
The Board expects these dynamics will drive the unemployment rate lower in the coming years, down to 6.2 per cent in 2026 and 5.8 per cent in 2027.
.
This is not an unexpected outcome. When we look at future job growth, most projections suggest we'll need as much as 50% of our future workforce coming from immigration or other strategies for encouraging people to participate in the labour market.
.
This might include encouraging older workers to work longer, supports for stay-at-home parents to return to the workforce or addressing other challenges that are keeping people out of workforce such as limited access to transportation, greater support with assistive technologies and increased skills training.
.
We can also expect employers will turn increasingly to technology, eliminating larger portions of entry-level jobs, a factor that has already had a significant impact on limiting youth employment.
.
Prior to last year, we were increasingly reliant on temporary foreign workers, international students, refugees and traditional immigrants to meet our labour market needs. Having restricted all of these groups for nearly a year, increased pressure is being placed on employers to hire individuals they might not otherwise have hired, which brings a corresponding decrease in the unemployment rate.
.
This could easily explain why we haven't seen more of an impact from the current trade tensions we've had with the United States.
.
We obviously live in a world of unknowns, with the potential for tariffs, how much those tariffs will be and how this will impact specific industries and local employers.
.
For my part, I've been expecting a major downturn in Canada's and the world's economy since 2019. We've seen continued economic growth in nearly all aspects of the economy, from real estate to inflation for more than 16 years now. And while this level of economic growth is unparalleled, who am I to say we're ready for a complete economic collapse.
.
I'm not an economist, who says what goes up must come down? If the Conference Board of Canada says we're going to see lower unemployment and higher wages in the years to come, why should I argue with this?
.
Or, we could have an economic collapse the likes of which we haven't seen since the great depression that takes decades to emerge from. Who knows?
.
According to the June 2025 Labour Force Survey, Canadian employment increased by 83,000 (+0.4%) in June and the employment rate rose by 0.1 percentage points to 60.9%. The unemployment rate fell 0.1 percentage points to 6.9%. This is in spite of almost daily news and economic updates about trade tensions with the United States.
.
In the meanwhile, the Conference Board of Canada is projecting hiring will be subdued for the rest of 2025, as businesses worry about expanding their payrolls amid trade war uncertainty.
.
We're already seeing wages increase. Average hourly wages rose 3.4 per cent year-over-year in May, which was unchanged from the pace seen in April.
.
Trade is not the only tool at the disposal of the government. The Bank of Canada kept its benchmark interest rate steady at 2.75 per cent as of last week. Officials have said they will wait for more clarity on how tariffs are affecting inflation and the wider economy.
.
The central bank can lower its policy rate when it wants to stimulate spending and give the economy a boost but keeps it elevated when there are fears of inflation getting out of hand.
.
Having a low interest rate hasn't resulted in rising inflation to this point. Annual inflation held steady at 1.7 per cent in May, according to Statistics Canada.
.
The whole situation seems so positive, but there are some contradictory black clouds on the horizon.
.
A new survey conducted by The Harris Poll on behalf of Express Employment Professionals reveals that, while most hiring managers (69%) still feel positive about their company’s hiring outlook for the remainder of 2025, that optimism has dimmed since a year ago (74%). At the same time, concern is growing, with 46% now expressing a negative hiring outlook, up from 38% last June.
.
While approximately 2 in 5 companies (43%) still plan to increase their workforce in the second half of the year, that is a decline from 49% last summer. For those planning to hire, the top reasons include the need to manage growing workloads (51%), fill newly created roles (35%) and replace employees lost to turnover (42%).
.
The proportion of companies planning to cut their number of employees (13%) has increased, compared to last year (8%). The majority cite cost cutting as the primary driver (67%), followed by adapting to government policy changes (30%) and responding to declining demand (25%).
.
The types of roles companies are targeting are also evolving. Companies are now most likely to hire mid-level employees (46%) as entry-level hiring (43%) has dropped sharply compared to last year (56%). Full-time positions remain the most sought-after (74%), while one quarter of companies (25%) plan to hire part-time roles.
.
So, as we consider the whole situation, there is economic analysis that would suggest the economy may be stronger a year from now. Certainly, in the short-term, employers are concerned how this will all unfold.
.
In conducting job development, I believe it's critical to present our clients and students as a safe, reliable choice. If you have tools such as wage subsidy, skills training or other financial incentives at your disposal, this is likely a good time to market them in concert with presenting clients and students as strong candidates.
.
As to whether wages will go up, there is little uncertainty in my mind that if we are confronted with significant tariffs this will have an unavoidable impact on inflation. Two or three years from now we all may be making a lot more, it just might not seem that way as the price of goods outpacing these increases.
.
And one more thing. Prior to the election, the Liberals did enact a number of limitations on immigration as I believe this is what the majority of Canadians wanted, whether it was right or wrong. To drive down unemployment or raise wages, labour force scarcity needs to continue.
.
It’s not actually that scarce. Last week, Statistics Canada reported the number of unfilled job postings hasn’t been this low since 2017.
.
What do you think? Will Prime Minister Carney continue to limit immigration?
.
According to an article in the Hamilton Independent, Mark Carney has hired an advisor named Mark Wiseman, who is well noted financier and the co-founder of the Century Initiative which supports a Canadian population of 100 million people by year 2100. This raises speculation that Prime Minister Carney isn’t really bothered by the disruption record-high immigration can create.
.
We’ll be discussing the economy as it stands as well as possible outcomes at our #MotivatingMondays meeting of the Canadian Job Development Network, Tuesday August 5th at 8:30am Pacific; 9:30am Mountain; 10:30am Central; 11:30am Eastern; 12:30pm Atlantic and at 1pm in Newfoundland.
.
On the morning of Tuesday August 5th 'Click this Link' to join the session LIVE.
.
'Developing a Comprehensive Approach to Effective Job Development'
WORKSHOP
.
For everyone who has registered for, ‘Developing a Comprehensive Approach to Job Development’, September 8th to 12th, we are sending out confirmations and calendar invites this week to everyone who has registered. If you haven’t registered but would like to know more, just visit: www.jobdevelopment.org/pro-d
.
'National Networking Day for Job Developers'
NETWORKING IN LOCAL COMMUNITIES
.
We’ve secured some amazing affiliate partners for the National Networking Day for Job Developers, on September 19th including CERIC, ASPECT BC, Western Canada Career Development Association, CDP Ontario, the Nova Scotia Career Development Association and Quebec’s Provincial Employment Roundtable. We would love it if you could join us and if there isn’t a session planned for your community, we’d love to help you host one. To learn more, just visit: www.jobdevelopment.org/sponsors
| 
