Economists suggest inviting more skilled immigrants to Canada
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Desjardins Economic Studies recently released a report that highlights the advantages of welcoming skilled newcomers into Canada.
According to the report, “Canada should continue to welcome newcomers who can help fill labour shortages in the construction sector. But we must also be mindful of the obstacles that prevent workers to reach their full potential. In particular, we should think about how to reduce discrimination and harassment in the construction sector.”
This recommendation comes at a time when Canada is experiencing a historic housing affordability crises, largely due to a lack supply of housing to meet the needs of a rapidly expanding population.
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Statistics Canada has released data on the third quarter of 2023. Canada’s population had reached 40,528,396 people. This is an increase of 430 635 over the last quarter and more than 500,000 over the 40,000,000 milestone reached in June 2023.
It is well known that maintaining housing affordability can be a challenge. The Canada Mortgage and Housing Corporation (CMHC) estimates that Canada will need 3.5 million more units on top of what is already being built to support the country’s current and growing population.
According to the latest data from the Canadian Real Estate Association, the average price of a house in Canada will be $657.145 by December 2023. It is higher in densely-populated cities like Toronto or Vancouver, where homes can cost over a million dollars.
Non-permanent Residents not Working Construction
The Desjardins Report says that construction is the fifteenth most popular industry in Canada, based on the number of employees.
Further,Census 2021 data can be used to create a variety of products, the report found that non-permanent residents (NPRs) and immigrants made up less than 22% of Canada’s construction workforce.
This shows that there has not been much growth since similar data were collected in 2019. It was also found that 21% newcomers were in construction occupations.
Further, a recent Bank of Canada report found that just “5% of employed NPRs (or 3% of total NPRs) go into construction as their main job.” This means NPRs are the fastest-growing segment of the population, but they are not working in construction jobs.
Costs and productivity are also factors
The report says that increased migration is not the only cause of the housing shortage. The report notes that the cost of construction materials is at its highest level in 10 years. The disruptions to the supply chain during the COVID-19 epidemic and high interest rates have made this situation worse.
CMHC estimates that high costs will cause some 40% of residential developers to reduce the number of future projects while over 30% will “put new projects on the back burner.”
Low productivity is also a problem in the housing industry. Desjardins claims that the productivity of the housing sector has been flat or decreasing and offers some suggestions for increasing production to meet demand. One suggestion is to create a catalog of pre-approved construction plans. This is a strategy that has also been endorsed by Canada’s Minister of Housing, Sean Fraser.
Preapproved house plans in Canada will reduce the time needed to obtain municipal approval as well as financing.
More Strategic Immigration
The Desjardins report concludes by recommending that Canada be more effective in welcoming immigrants in the construction sector. The report notes that, in 2022 only 455 permanent residents will have become permanent residents by way of the Federal Skilled Trades Program (FSTP). There were no Express EntryThe FSTP will be holding draws in 2023 for candidates.
A report by the Royal Bank of Canada (RBC) echoes this sentiment, saying that “Canada needs to be more strategic in selecting immigrants – and temporary residents who often become future immigrants – with the strongest long-term economic prospects, including those outside highly-educated fields.”
Immigration, Refugees and Citizenship Canada(IRCC) is inviting skilled newcomers into sectors that are experiencing a labour shortage. In May 2023.IRCC introduced category based selection drawsCandidates who have a human capital attribute, or a profession that is in demand in Canada. One of the categories includes candidates with trades occupations. IRCC only held two draws to invite these candidates. A total of 2,500 ITAs were issued for Express Entry candidates who have experience in a specific trade occupation.
